Market Analysis
Berlin rental market 2016
Net cold rents rise faster, ancillary costs keep falling
Net cold rents in Berlin rose 1.6 percent year-on-year in February 2016. Falling energy prices pushed ancillary costs down by 4.0 percent, leaving gross warm rents up just 0.9 percent.
Peter Guthmann
Housing costs in Berlin were split at the start of 2016. According to the Statistical Office of Berlin-Brandenburg, net cold rents rose by an average of 1.6 percent year-on-year in February. In previous months the increase had been 1.5 percent each time, so the pace picked up slightly.
At the same time, tenants were not paying more overall. Ancillary costs continued to fall, declining by 4.0 percent compared to the same month a year earlier. As a result, gross warm rents rose by just 0.9 percent.
Why ancillary costs are falling
The drop in ancillary costs is mainly due to lower energy prices. Heating oil was 34.5 percent cheaper than a year ago. This benefits tenants in unrenovated older buildings with oil heating, which are still common in parts of Neukoelln and Charlottenburg. In new build areas and central locations like Mitte, where district heating or gas systems prevail, the effect is smaller.
Compared to January, heating oil prices had already risen again by three percent. Since this only shows up in the annual service charge statement, no month-on-month change was measurable yet.
Lower service charges plus 1.6 percent cold-rent growth: a quiet win for landlords
For landlords of apartments in Berlin, the maths works in your favour. This year's service charge statements will come in lower, which helps tenant satisfaction, while net cold rents keep edging up by 1.6 percent. The rent cap from June 2015 is meant to moderate increases on new lettings, yet the market keeps its underlying momentum.
Whether heating oil holds onto its 34.5 percent discount will decide how much of that net relief stays with tenants over the next year of market development.
