Berlin's Expert Committee for Property Values has released its preliminary figures for 2013. The committee calls it a record year, although final numbers will not be published until mid-April.
More money, same number of transactions
The number of purchase contracts remained nearly unchanged at 31,925, compared with 31,815 the year before. Monetary turnover, however, rose 11% to over 13.8 billion euros. At the same time, the area of land traded fell by 8%. Less space was sold for significantly more money, a clear sign of rising prices per square meter.
Property transfer tax as an accelerator
On January 1, 2014, Berlin's property transfer tax rose from 5.0% to 6.0%. Many buyers moved their planned investments into the final quarter of 2013 to benefit from the lower rate. This pull-forward effect generated a wave of contract signings that are not yet fully reflected in the preliminary figures. The final numbers are expected to be even higher.
What the figures mean for property owners
The gap between a stable number of transactions and rising monetary turnover shows that prices for apartments in Berlin increased noticeably in 2013. For owners of existing properties and apartment buildings, this translates into higher portfolio valuations.
Continued population growth, a strengthening economy and international interest are driving demand. Central locations like Mitte remain most sought-after, but boroughs such as Neukoelln are also attracting growing investor attention. Prices are expected to continue rising in 2014, though potentially at a more moderate pace.
