Market Analysis
Economic indicators and the property market
Berlin economic data 2015: incomes rise and tourism hits record levels
Berlin's purchasing power grew 2.1 percent in Q3 2014 while inflation stood at just 0.7 percent. Meanwhile, hotels counted nearly one million guests in November alone.
Peter Guthmann
The structural data for Berlin at the start of 2015 painted a positive picture. Both income growth and tourism figures pointed to continued strong demand for housing in the capital.
Real wages on the rise
According to the Office for Statistics Berlin-Brandenburg, the average gross monthly salary in the third quarter of 2014 stood at 2,897 euros, up 2.1 percent from the same quarter the previous year. Consumer prices rose by just 0.7 percent over the same period. In real terms, Berliners had noticeably more money to spend. This increased households' ability to afford higher rents or to purchase apartments in Berlin.
Tourism record in the Wall anniversary month
In November 2014, marking the 25th anniversary of the fall of the Berlin Wall, the city's hotels counted nearly one million guests and 2.2 million overnight stays. Compared with the previous year, that represented an increase of 9.2 percent in guests and 10.2 percent in overnight stays. The growth came equally from domestic visitors (+9.2%) and international ones (+9.3%).
Particularly strong increases came from the United Kingdom (+20.6%), the USA (+20%) and Denmark (+21%). Visitors from Israel saw a notable jump of nearly 61 percent.
Impact on the property market
Both trends were relevant for Berlin's property market. Rising real incomes supported demand for rental and owner-occupied apartments. The tourism boom boosted the market for furnished apartments and short-term rentals, particularly in central boroughs such as Mitte and in trendy neighbourhoods popular with international visitors.
The international presence attracted not only tourists but also skilled workers and students who later sought permanent housing. Boroughs like Neukoelln experienced steady internationalisation as a result.
Assessment
The combination of rising purchasing power and growing international interest supported market development in Berlin. The data gave owners and investors a solid basis for expecting that demand for housing in the capital would continue to grow.