25 million overnight stays and economic growth: Berlin's position in early 2013

In his New Year's address for 2013, Governing Mayor Klaus Wowereit drew a positive balance. Berlin was in better economic shape than a year ago and held a leading position nationally. What this means for the property market can be read from concrete figures.

25 million overnight stays and their impact

2012 was the first year Berlin exceeded 25 million overnight stays. That is primarily a tourism figure, but it has direct consequences for the property market. Hotels, hostels and holiday apartments are in demand, particularly in Mitte and inner-city boroughs. Pressure on commercial space in tourist areas is rising. At the same time, Berlin's international visibility attracts new residents, which in turn increases demand for housing.

Economic growth and the labour market

Wowereit's claim that Berlin leads in economic development is supported by the growth figures of recent years. Economic growth typically brings employment. More jobs mean more people moving to the city, and more people moving in means greater demand for apartments. For the apartment market, this results in demand that has outstripped supply for years.

Soft location factors

Beyond economic data, Wowereit emphasised openness, diversity and tolerance as locational advantages. These factors are hard to measure in euros, but they play a role in explaining why international professionals and students choose Berlin over other cities. Demand for rental and owner-occupied apartments also depends on who moves to a city and why.

What this means for property owners

The combination of a tourism boom, economic growth and population influx supports Berlin's property market in early 2013. Apartment buildings in central locations benefit from low vacancy rates and stable tenant demand. The political statements reflect a trend that was already visible in transaction data from previous quarters.