In 2014, the Investitionsbank Berlin (IBB) predicted a record year for residential construction in the German capital. According to its market report, building permits were expected to reach around 20,000, surpassing even the post-reunification construction boom of the 1990s.
Nearly 14,500 permits in nine months
In the first three quarters of 2014 alone, Berlin authorities approved the construction of nearly 14,500 apartments. IBB CEO Rolf Friedhofen expected the figure to reach approximately 20,000 by year-end. About 17,500 of those were for new construction, with the remaining 2,500 covering attic conversions and changes of use. At the same time, roughly 8,200 projects were completed during the year.
Comparison with the 1990s
The 2014 building boom was remarkable in scope. In the peak year of 1995, Berlin issued around 30,000 building permits, but 70 percent of those were concentrated in the eastern boroughs. The IBB pointed out that Berlin still had substantial land reserves, ruling out any talk of overheating. For 2015 through 2017, the IBB projected up to 35,000 permits per year, potentially adding over 55,000 new apartments in Berlin by the end of 2017.
Why Berlin was growing so fast
The drivers were straightforward: Berlin's population was expanding by roughly 40,000 people per year, while new construction had stagnated for a long time. This gap between supply and demand fuelled building activity. Low interest rates and investors seeking tangible assets further increased demand for investment apartments in Berlin.
What this meant for owners and investors
The IBB forecast sent a clear signal: demand for housing in Berlin would likely absorb the rising supply. Investors found opportunities particularly in boroughs such as Pankow, Lichtenberg and Mitte. The city's focus on densification and activating brownfield sites proved to be a lasting driver of market development in the years that followed.
