New construction Berlin 2016: Senate targets too low, says IVD

In mid-2016, the German Real Estate Association (IVD) Berlin-Brandenburg criticised the Berlin Senate's new construction targets. The planned 15,000 to 20,000 new apartments per year fell well below actual demand, according to the IVD's quarterly report.

IVD: demand up to three times higher

Marco Woelfle of the Center for Real Estate Studies, the report's author, argued that the Senate was planning "at the lower end of the forecast range." Due to strong in-migration and the refugee situation in 2015/2016, he estimated real demand at up to 60,000 apartments per year.

Why the gap was so large

Figures from the Federal Statistical Office showed the scale of the problem: over the previous five years, Berlin's housing stock had grown by just 23,000 units, fewer than 5,000 per year. At the same time, the population was growing by 40,000 to 50,000 people annually. This supply gap laid the groundwork for the rising purchase and rental prices that followed.

New construction shifts to outer boroughs

In central locations such as Mitte or Friedrichshain-Kreuzberg, little land remained for large-scale new construction. Projects in Pankow, Lichtenberg, and Marzahn-Hellersdorf gained importance. While the number of building permits increased, bureaucracy, skilled labour shortages, and rising construction costs slowed completions.

What this meant for owners and investors

The IVD analysis confirmed what market trends in the following years showed: the supply shortage continued to push prices for Berlin apartments upward. For owners of existing properties, this meant stable value development. For investors, it was an indication that Berlin's housing market would remain characterised by excess demand for years to come.