Property Market Report 
Berlin 2025 

Berlin Residential Market 2025

Dear Readers,

The Berlin residential market developed differently across segments, locations and price ranges in 2025.

Existing apartments cost an average of 5,130 EUR/m², an increase of 3% compared to the previous year. By the end of 2025, approximately 11,300 apartments will have been notarized, similar to 2024. Demand is concentrated on properties under 400,000 euros.

Regional price development ranges from +9% to -5%.

New construction averages 8,200 EUR/m², with around 1,400 transactions by year-end.

In the rental market, asking rents for existing apartments are rising to 16.35 EUR/m². Structural scarcity persists.

From 2026 onwards, additional apartments may potentially enter the market as sales restriction periods from the conversion ban expire.

Anyone buying or selling now requires precise market knowledge and professional timing.

Yours, Peter Guthmann

Resale Apartment Market

Resale Apartment Market

After two years of price declines (2023: -4%, 2024: -3%), transaction prices rose 3% in 2025 to average 5,130 EUR/m². Asking prices stand at 5,810 EUR/m² or 522,800 euros per apartment.

• Transaction price: 5,130 EUR/m² (+3% year-on-year)
• Average apartment price: 372,100 euros (approx. 72 m²)
• Asking price: 5,810 EUR/m² or 522,800 euros
• Transactions 2025: approx. 11,300 (Q1-Q3: 8,488)
• Sales structure: 78% vacant, 17% tenanted, 5% tenant purchase
• District price range: 3,180 EUR/m² (Marzahn-Hellersdorf) to 6,030 EUR/m² (Mitte)

Long-term Price Development

Current transaction prices are 18% above 2020 levels, 4% below the 2022 peak. Since 2015, prices have more than doubled. The strongest growth occurred between 2017 and 2021 with annual increases of 12% to 14%.

Regional Development

Price development in 2025 follows local patterns. Affordability, infrastructure, and supply-demand ratios determine dynamics. Peripheral districts in the east and north are rising more strongly, while established western locations continue to correct.

• Strong Performers: Treptow-Köpenick leads with +9.0% (4,130 EUR/m²). Pankow (+4.0% to 5,670 EUR/m²), Tempelhof-Schöneberg (+4.0% to 4,840 EUR/m²), and Reinickendorf (+4.0% to 3,890 EUR/m²) also show significant increases. Demand concentrates on affordable properties under 400,000 euros.
• Central Locations: Mitte rises 3.0% to 6,030 EUR/m² and remains Berlin's most expensive district. Friedrichshain-Kreuzberg (+1.0% to 5,810 EUR/m²) and Charlottenburg-Wilmersdorf (+1.0% to 5,630 EUR/m²) show moderate increases. High price levels limit dynamics.
• Declining Areas: Marzahn-Hellersdorf loses 5.0% (3,180 EUR/m²). Steglitz-Zehlendorf (-2.0% to 4,580 EUR/m²) and Neukölln (-1.0% to 4,620 EUR/m²) are also correcting.

Transaction activity concentrates in Charlottenburg-Wilmersdorf with 1,438 sales in Q1-Q3, followed by Pankow (1,022), Friedrichshain-Kreuzberg (984), and Mitte (969). At the lower end are Marzahn-Hellersdorf (96) and Lichtenberg (259). The difference between the most expensive and cheapest district is 2,850 EUR/m² or 90%.

Market Activity

Housing supply increased in 2025: Almost 34,000 listings in Q1-Q3 face around 8,500 transactions. This represents 5% more listings than the previous year and 40% more than 2022. Longer marketing times result. The transaction focus lies between 350,000 and 400,000 euros.

The most active districts are Charlottenburg-Wilmersdorf (1,442 transactions in Q1-Q3), Pankow (1,024), Friedrichshain-Kreuzberg (984), and Mitte (969).

78% of apartments are sold vacant, 17% tenanted, 5% as tenant purchases.

Additional Supply Coming Through Condominium Conversions

An additional dynamic shaping the market in the coming years stems from the conversion of rental units into condominiums in previous years. In conservation areas (Milieuschutzgebiete), converted units face a statutory seven-year sales restriction, allowing sales only to sitting tenants. This restriction now expires for units converted in 2018. As a result, a potential additional supply emerges that could, in principle, enter the open market.

The volume is considerable: In 2018 alone, more than 11,300 apartments were converted across Berlin. Concentrations were highest in districts such as Neukölln, Friedrichshain, and Wilmersdorf, each with well over 1,200 units. One of the key developments to monitor in the coming quarters will be how many of these units actually reach the market and influence supply in their respective submarkets.

New Development Market

The average new development apartment costs 485,500 euros at 8,220 EUR/m² (+3% year-on-year). Projected for 2025, around 1,400 transactions will be notarized, 28% below the previous year and 61% below 2021. Asking prices stand at 8,740 EUR/m² or 841,300 euros.

Price Differential to Resale Units

One square meter of new development costs 8,220 euros, resale units 5,130 euros – a difference of 3,090 euros. A 70 m² apartment costs 575,000 euros in new development, 360,000 euros in resale stock. This differential has been rising for years: in 2020 it was 2,140 euros/m², in 2015 only 1,480 euros/m². Rising construction costs – materials, wages, higher standards – are driving up new development prices. At interest rates of 3.5-3.8%, new development is beyond the affordability of many households.

An example: A 500,000-euro new development apartment at 4% interest and 2% amortization means 2,500 euros monthly debt service. Add purchase transaction costs of around 70,000 euros, totaling 570,000 euros. With 20% equity (114,000 euros) and 30-year financing, a household must permanently have over 3,500 euros net income – too much for many Berlin households.

Supply and Demand

6,500 listings in Q1-Q3 face 1,058 transactions. Despite the supply surplus, new development prices remain stable. There is little room for negotiation. Construction prices are high, projects must be solidly financed, project timelines are long.

Berlin needs 15,000-20,000 new apartments annually, but far fewer are completed. The homeownership rate stagnates. Many plots were acquired at high prices before the interest rate turn. High land and construction costs, approval procedures, and low demand burden developers' liquidity. Projects are being postponed.

Rental Market

Berlin's rental market consists of three segments: existing rents in ongoing contracts, housing associations, and the free asking rent market.

The spread is considerable. Existing tenants pay an average of 7.67 EUR/m² (2022 Census), while new rentals in the free market cost 16.35 EUR/m². This gap creates a lock-in effect. Turnover is below 2% annually, active market vacancy stands at 0.3%.

For property owners, this means persistently high demand for new rentals and stable asset values.

• Asking rent resale: 16.35 EUR/m² (+8.3% year-on-year)
• Asking rent new development: 22.00 EUR/m² (-4.6% year-on-year)
• Existing rent (2022 Census): 7.67 EUR/m² (all ongoing contracts)
• Active market vacancy: 0.3%
• Turnover rate: below 2% annually
• Share of fixed-term contracts: approx. 50%

Existing Rents

The existing market includes all ongoing rental relationships. Average net cold rent is 7.67 EUR/m² (2022 Census). This value is in the national average range. There is no statistical update; current values are presumably slightly higher.

Regionally, existing rents vary between 7.04 EUR/m² in Marzahn-Hellersdorf and 8.73 EUR/m² in Charlottenburg-Wilmersdorf. Central districts Mitte (8.67 EUR/m²), Pankow (8.51 EUR/m²), and Friedrichshain-Kreuzberg (8.36 EUR/m²) are above average, eastern and peripheral districts below.

Asking Rents

Asking rents for resale apartments currently stand at 16.35 EUR/m², an increase of 8.3% year-on-year. Berlin thus shows the highest dynamics among Germany's top-7 cities. Over the past five years, asking rents rose by 45.5%. New development apartments are offered at an average of 22.00 EUR/m².

Structural scarcity is measurable. Active market vacancy is 0.3%, annual turnover rate below 2%. A balanced market would require 2-3% vacancy. The housing shortage is estimated at about 100,000 units. New construction activity is below demand.

Spread and Lock-in Effect

The difference between existing rents and asking rents is considerable. A tenant moving from an existing apartment to a new rental pays more than double. For a 70 m² apartment, this means a surcharge of around 610 EUR monthly.

This spread creates a lock-in effect. Tenants do not give up existing apartments, even when they no longer suit their life situation. Average tenancy duration is rising. For property owners, this means stable, long-term rental relationships. Rent increases and modernizations are regulatory limited.

New contract rents continue to rise while existing rents remain at low levels. Actual paid rents citywide average 7.67 EUR/m² (2022 Census). In central locations, existing rents are higher: Charlottenburg-Wilmersdorf 8.73 EUR/m², Mitte 8.67 EUR/m², Friedrichshain-Kreuzberg 8.36 EUR/m².

The housing shortage lies in fundamental scarcity, not in existing rents. The lack of housing construction creates cascade effects:

On one hand, demand rises through the growing number of single-person households. On the other hand, the missing trickle-down effect blocks the internal housing market: Older households cannot or do not want to downsize and occupy large apartments that are missing for subsequent generations and families.

Berlin's real estate market is shaped by macroeconomic conditions: key interest rates, construction costs, inflation. The years 2015 to 2025 encompass a complete cycle – from negative interest rates and low costs through inflation to monetary policy normalization.

From 2016 to 2022, the ECB kept the main refinancing rate at zero percent. The deposit rate for banks was in negative territory to make credit cheaper and stimulate investment. Financing was as cheap as ever, alternative investments offered little return. Real estate became the preferred investment.

In July 2022, the ECB initiated the interest rate turn. Within 15 months, it raised the deposit rate from -0.5% to 4.0% (September 2023) – the steepest increase in ECB history. The main refinancing rate rose from 0% to 4.5%. These measures were intended to curb high inflation triggered by energy price shocks and supply chain problems.

Since June 2024, the ECB has been gradually lowering key interest rates. Eight reductions of 0.25 percentage points each occurred through June 2025, since then rates have remained unchanged. In October 2025, the deposit rate stands at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40%.

The interest rate turn affects Berlin market segments differently. Prices for apartment buildings and tenanted condominiums as capital investments fell by around 30%. Vacant condominiums showed a significantly smaller decline. Transaction volume decreased across all segments.

The combination of increased financing costs, high construction costs, and subdued income development burdens demand. At the same time, new construction activity remains well below demand.

Price multiples in the investment segment have decreased significantly, causing net initial yields to rise. Investors are pleased with the revaluation of many properties, investing in a consolidated, opportunity-rich market with low risk and the prospect of a new cycle. With the end of interest rate cuts and a stabilizing inflation rate, confidence in the market is growing.

Trend

Berlin's residential market has reorganized itself after the interest rate turn, with prices for resale apartments rising moderately, while apartment buildings stabilize at lower multiple levels and new development remains restrained. What connects all segments is persistent scarcity – active market vacancy stands at 0.3%, demand structurally exceeds supply.

Macroeconomic conditions have calmed. The ECB is pausing interest rate cuts, inflation is normalizing, and construction financing is moving stably around 3.5-3.8%. This interest rate level corresponds to historical averages, and after prices have adjusted and yields have increased, the calculation works again. Demand concentrates on what is affordable – predominantly properties under 500,000 euros.

2026 will bring additional dynamics when sales restriction periods from the conversion ban gradually expire in central districts. Numerous apartments were converted in 2020 and 2021, concentrated in Friedrichshain-Kreuzberg, Charlottenburg-Wilmersdorf, and Mitte, which now creates additional supply in sought-after locations – simultaneously with possible regulatory tightening in tenancy law.

Berlin continues to grow, housing demand remains high, and new construction activity is far below what is needed annually. This structural gap secures demand long-term. The market functions, but requires precise knowledge of local dynamics, as differences between locations and property types are considerable. Anyone wanting to buy or sell successfully needs professional marketing, realistic pricing, and the right timing. We are happy to assist you.