Berlin building land up 13 per cent: expert committee releases 2015 figures

The expert committee on property values (Gutachterausschuss) has published its "Ad hoc Market Report Building Land". The analysis covers sales from August to October 2015, compared with standard land values from the start of the year. The result: building land in Berlin rose in price by an average of 13 per cent by October.

22 per cent increase in prime locations

In sought-after central locations such as Mitte, Charlottenburg or Prenzlauer Berg, land prices rose by 22 per cent. High demand for housing and limited availability of plots are pushing prices particularly hard here. Even in basic residential locations, prices increased by 8 per cent. Market data confirm that the increase is city-wide.

Reinickendorf the sole exception

The only exception is Reinickendorf, where land prices fell by four per cent. This may reflect local market conditions or a lower number of high-value transactions during the review period.

Construction costs rising in parallel

Alongside land prices, new construction also became more expensive. On average across 2015, construction service prices rose 1.6 per cent compared to 2014. The construction price index reached 112.6 in November 2015 (base year: 2010).

Prices for painting and decorating work rose particularly sharply (+5.4 per cent), as did carpentry and timber construction (+4.3 per cent). Finishing work overall increased by 2.3 per cent, while structural work went up 1.2 per cent.

Implications for investors and owners

The combination of rising land and construction prices pushes up total costs for new development projects. For owners of undeveloped plots, the trend means an increase in asset value. For developers, margins are tightening. These costs are likely to feed through into end prices for new apartments in Berlin.