Berlin land market 2014: Fewer sales and falling prices

According to the Berlin-Brandenburg Statistics Office, only 1,150 building land sales were recorded in Berlin in 2014, a 24 percent drop from the 1,512 transactions in the previous year. The average purchase price also fell, from 346 euros per square metre to 303 euros. In total, around 2.1 million square metres changed hands for a combined volume of roughly 650 million euros.

Wide price range across boroughs

The borough-level data shows just how varied Berlin's land market is. In Mitte, average prices reached 1,116 euros per square metre. Charlottenburg-Wilmersdorf came in at 976 euros, Friedrichshain-Kreuzberg at 489 euros. At the other end: Marzahn-Hellersdorf at 130 euros per square metre.

This spread makes clear that there is no single "Berlin land price." Location determines value, and city-wide averages say little about individual sites.

Less supply rather than less demand?

Fewer transactions do not necessarily mean less interest in building land. Industry observers suspect that many owners are holding back their plots because they expect prices to keep rising. Fewer available sites then automatically lead to fewer sales. The fact that apartment prices for existing stock continued to climb supports this reading.

For investors looking for land to build new developments, this does not make things easier. Competition remains high in sought-after locations, and the lower average price likely reflects a shift of transactions toward cheaper peripheral areas.

Brandenburg: An opposite trend

While the Berlin market stagnated, building land sales in Brandenburg rose 9 percent in 2014. However, the price level there averages just 49 euros per square metre, a fraction of Berlin's values. The trend suggests that developers and private builders increasingly turn to the surrounding region when suitable plots within Berlin are hard to find.