Market Analysis
Rent trends in Berlin
Berlin rent index 2019: Average rent of 6.72 euros and what the number actually tells us
The 2019 Berlin rent index reports an average rent of 6.72 EUR/sqm. But the figure primarily reflects existing tenancies. The open market looks different.
Peter Guthmann
Are the numbers surprising? According to the 2019 rent index, rents in Berlin are rising by only about 2.5 percent per year. The average rent stands at 6.72 euros per square meter. The survey covers nearly 1.4 million rent-index-relevant apartments as of September 2018.
The rent index points to a normal metropolitan market segmented into sub-markets. And on closer inspection, it reveals what everyone already knows: only building more apartments relieves the pressure.
What the rent index captures and what it misses
The Berlin rent index is a qualified rent index under Section 558d of the German Civil Code (BGB). It reflects the local reference rent, meaning rents in existing tenancies. It does not, or only partially, cover:
- New apartments completed after October 1, 2014
- Rent-controlled housing
- Furnished apartments and temporary lets
- New leases after comprehensive modernization
The 6.72 EUR/sqm primarily reflects existing stock. On the open market, where new leases and modernized units are offered, rents are higher.
Open market: Wide spread
Our analysis of rental listings on major portals shows that the price segment between 5.00 and 8.00 EUR/sqm has nearly vanished from the market since 2012. Combined, segments up to 11.00 EUR/sqm still account for more than half of new leases on the open market. In 2019, a noticeable slowdown in rent growth is also visible across the entire city. Recently hyped locations are losing some momentum. Classic, high-quality locations, on the other hand, are gaining.
[Chart] This section contained an interactive chart showing rent trends.
Quality factors: Construction period, location, amenities
The rent index differentiates by seven construction period categories (pre-1918 to 2003+), three location ratings (basic, medium, good), and features such as bathroom, kitchen, and heating. Location classification is done by the Office of Statistics at the statistical area level.
Legal significance
For property owners, the rent index is the basis for rent increases under Section 558 BGB. The cap on increases in Berlin is 15 percent within three years. For new leases in tight markets, the rent cap applies: a maximum of 10 percent above the local reference rent.
Under Section 559 BGB, 8 percent of modernization costs can be passed on to the rent annually, capped at 3 euros per square meter within six years.
Regional differences
Rent levels vary considerably across the city. Central locations such as Mitte, Friedrichshain-Kreuzberg, and Charlottenburg-Wilmersdorf are above average. Outer areas like Spandau or Marzahn-Hellersdorf are below.
For property valuations and apartment building investment decisions, it is important to distinguish between existing rents and achievable new-lease rents. The market data shows: more apartments on the market remain the key factor in stabilizing rent levels.