Berlin Property Report
2025 Q2

Are you suffering from VUCA?

Dear Readers,

Are you familiar with the term VUCA? This acronym stands for a mix of volatility, uncertainty, complexity, and ambiguity—a shorthand for what is happening in the capital markets right now. The shockwaves of U.S. tariff anarchy have shown how quickly the supposed security of high returns and growth rates can dissolve.

The best remedy for VUCA headaches does not come from your pharmacy, but rather in the form of real estate. While stock markets recently dropped by 15% or more, property owners could remain composed. Current data from the Berlin Committee of Valuation Experts (GAA) shows a turnaround in transaction volume, number of deals, and prices across various segments of Berlin’s real estate market. Skeptics who just a few weeks ago might have dismissed a 2.4% increase in transaction prices as insignificant in comparison to the capital markets probably no longer take that view.

The GAA has recorded around 2,400 transactions in the existing-property segment for the first quarter of 2025. This number will likely rise by our next report, as many deals from the first quarter only appear in the statistics during the second or third quarter.

Unfortunately, the new-build segment numbers are less encouraging. Less than 300 purchase agreements were notarized in Q1 2025, and a recovery is not yet in sight. Purchase prices in this market are down by about 1.6%.

We hope our brief report provides the transparency you need to make sound decisions in the Berlin real estate market—despite volatility, uncertainty, complexity, and ambiguity.

Peter Guthmann

Back on Track: Berlin Real Estate Prices Show Signs of an Upturn

Recent data from the Berlin Committee of Valuation Experts (GAA) indicates that, after a market cooldown in 2023 and sideways movements in 2024, notarized purchase prices for existing properties edged upward again in the first quarter of 2025. Although the values have yet to reach the levels of 2022, it appears the market has completed its bottoming-out phase. A typical existing apartment in Berlin measures about 70 square meters and costs around €373,000—approximately 2.2% or €120 per square meter more than in the previous year. Over the past 15 years, apartments have become smaller, decreasing from an average of 74 to 70 square meters, while the average sales price climbed from €125,000 to the current €373,000.

New housing market lags

Data from the GAA underscores the structural problems in the new-build sector. High construction costs, interest-rate-driven declines in demand, and reduced supply still shape this market segment. The price adjustments needed by the construction industry are hard to implement in the mid-income bracket; the last significant price hike took place between 2021 and 2022. Since then, new-build apartments in Berlin have been stagnating.

Data shows that the trend towards locations within the S-Bahn ring is continuing

In terms of prices and transaction volumes, the central districts continue to pull away from the outer ones. On the one hand, this pattern reflects strong demand for high-quality residential locations; on the other, it highlights investment opportunities in less central yet often well-connected areas.

• Mitte: around €7,000/m² for existing properties

• Prenzlauer Berg: around €6,500/m²

• Friedrichshain: around €5,900/m²

The highest number of property sales (shown as yellow bars) currently occurs in:

• Charlottenburg

• Wilmersdorf

• Friedrichshain

• Neukölln

Purchase Prices

The average absolute purchase price for an existing apartment is highest in the Berlin-Mitte district. With around €545,500 and a median price of approximately €6,930 per square meter, Mitte sets the standard. Apartments in Treptow and Spandau are selling for about half that amount. The following table details the median absolute purchase prices, average square meter prices, and apartment sizes.

Greater price sensitivity is reflected in smaller flat sizes

Increased purchase prices, higher interest rates and high equity requirements from banks are making buyers more price-sensitive. The result is a shift in purchasing activity towards smaller flats. The marketing time for larger units has increased. Practical experience also confirms that buyers are attaching more importance to the condition of the flat. Maintenance backlogs and foreseeable investments are being scrutinised more closely than before with a view to a smaller budget.

New Builds

The sale of new-build flats in Berlin continues to stagnate. Around 260 sales were registered in the first three months of 2025. Even taking in account that many contracts are recorded in statistics later later in the year, this number shows that the decline in sales has not been stopped so far. An analysis over 10 years also reveals a decline in living space from 92 to 70 square metres.  An average new-build flat currently measures around 70 square metres and costs an average of EUR 519.00.

Rental Housing Market Berlin

Berliners are having to accept further rent increases for new lettings, while existing rents are at a very low level both nationally and internationally. Rents were last recorded at an average of EUR 7.67/m² in the 2022 census. Only in central districts are average net rents above this threshold. In Charlottenburg, the net cold rent is around EUR 8.43/m², in Mitte EUR 8.30/m² and in Friedrichshain-Kreuzberg EUR 8.19/m². It shows that the core of the housing problem lies in the fundamental shortage and not in the existing rents. The years of delayed progress in housing construction are leading to cascading effects that are further exacerbating the situation. Ageing households are unable to downsize and occupy large flats that should actually be available to future generations. The lack of the so-called ‘trickle-down’ effect means that families are living ever closer together. At the same time, the number of single-person households continues to rise, creating new needs that cannot be met.

The rental market has been missing out on flats that were available for sale because of the strict regulation of existing rents instead of new builds. This started with neighbourhood protection (Milieuschutz) and ended with the rent cap. The rent cap has clearly taken thousands of flats off the housing market.

Average ‘absolute’ rents

At least as important as the rents per square metre are the average total net rents, which were also surveyed in the 2022 census and are shown here on a map. Interestingly, in addition to the very central areas of the city centre, Berlin's peripheral districts are also divided into higher rent ranges.

Trend

Let's return to VUCA, which we used to introduce this report: Volatility, uncertainty, complexity and ambiguity: the financial markets are these things right now. And, interestingly, it's the Berlin property market that's showing particular strength in this environment. While stock markets have recently fallen by up to 15%, the property market in Berlin is showing clear signs of recovery in purchase prices, money turnover and sales in some submarkets. This market data is not only interesting from the perspective of the first quarter. It is clear that the property market in Berlin is undergoing a turnaround, as evidenced by the data from the second half of 2024. While the momentum is still comparatively weak and cannot be applied to all submarkets, it is clear that the property market in Berlin is on the rebound. However, in a macroeconomic context where capital markets are eroding, the growth rates are significant for several reasons. Firstly, the trend reversal was not abruptly stalled by external influences. Secondly, the Berlin property market is holding its own and growing again despite the still comparatively unfavourable interest rate environment. Thirdly, owners, sellers and investors are doing business calmly. In short, it is clear that the advantages of concrete gold are unbeatable. The return of buyers and prospective buyers, attractive entry factors and solid rental development form a strong and reliable foundation for long-term value creation.

In a time of uncertainty, the Berlin property market is a beacon of stability, offering investors what they need most: Consistency, predictability and sustainable value growth.