Berlin property prices May 2023: Correction, not collapse

Correction, not a trend reversal

Berlin's property market spent the past six months in uncertain territory. The interest rate turnaround in mid-2022 and rising inflation made buyers and sellers nervous. By the second quarter of 2023, conditions are calming down. The price drops occurred mainly where there had been speculative jumps in early 2022. What we are seeing is a correction, not a crash.

Prices edging up again

Market data show that resale apartment prices across Berlin are rising slightly again. Over the past three months, six months, and year on year, the figures point to a moderate recovery.

A rapid, broad based price increase is unlikely. But the fundamentals in Berlin remain intact: continued population growth, limited supply, and strong rental demand.

Recovery varies by borough

Not all areas are recovering at the same pace. In Friedrichshain-Kreuzberg and Charlottenburg-Wilmersdorf, slight downward trends have already reversed into positive territory. In Pankow, the price peak from spring 2022 has been corrected and the market is moving sideways at a stable level.

For investors, the borough level reports are worth studying. The differences between locations create entry points in areas with recovery potential.

Longer time to sell

Higher mortgage rates are having a direct effect: apartments in Berlin are selling more slowly than a year ago. The average marketing period currently sits between 14 and 21 weeks.

The 2,500 to 5,000 EUR per sqm segment is most affected. This is where most tenanted apartments, the classic investment properties, are found. Since January 2023, time on market in this bracket has risen noticeably as financing has become harder for many buyers. The extremely short sales cycles of the Covid period in 2020, when supply was scarce, are behind us for now.