Berlin Real Estate 2021
After more than a decade of linear growth in Berlin's real estate market, it is tempting to make it easy. You could say, for example, "Supply is tight and prices keep rising". But anyone who owns a property in Berlin knows that the reality is more complex. For example, because there have been regulations in Berlin for much longer than prices and rents have been rising; the first milieu protection areas in Berlin date back to 1991. Or because Berlin is extremely heterogeneous in terms of locations and location qualities.
But one thing is certain: Berlin remains a magnet for people from all over the world. And since one can almost certainly assume that the influx will increase again after the pandemic, the curve of demand, which is already high, will keep rising.
Doubts about whether property values will continue to develop so rapidly are justified, however. The housing cost ratio in Berlin is relatively high on account of the comparatively moderate incomes and is reaching a natural limit. The potential of Berlin properties therefore no longer lies solely in the achievable return. Anyone buying a flat in Berlin 10 years ago paid a median price per square metre of just under 1,700 euros. In resale, a seller today demands just over 5,000 euros per square metre of living space. So the message could be that properties can currently be resold at a profit of around 200 percent after a holding period of 10 years. And buyers can be sure that very attractive increases in value will continue to be possible in Berlin in future.
Growing demand, shrinking supply
Now let's look at the status quo. Here, a further growing demand meets a scarce and further shrinking supply. Figures from Berlin's appraisal committee (GAA) show that flat sales have been declining quantitatively for years. Whereas in 2015 around 24,600 sales contracts were notarised, in 2019 the figure was around 18,500 and in 2020 around 17,500.
202.90 % plus in 10 years
Anyone who made a property investment in Berlin 10 years ago looks back on a price increase of 202.90 %. As of 30.07.2021 , the median asking price we have calculated is around 5,130 EUR/m², which corresponds to a development of around 5.50 % compared to the same period a year ago.
In the past 12 months, about 34,190 existing properties were advertised on the relevant real estate portals. For new build projects, the 12-month median list price is around 6,880 EUR/m². In one year around 6,700 properties were brought to market from a variety of projects.
Much less rental offers
As of 30.07.2021 , the rental development compared to the previous year is around 18.90 %. Measured across all real estate portals the median asking rent in the current quarter is 13.35 EUR/m². Rental offers have tended to be in free fall since the end of 2019 at the latest. Many landlords have lost confidence in Berlin's political framework and decide to sell their flats as soon as they become vacant.
Median values based on the offers of the past three months.
Since 2010, we have also been recording rental offers in Berlin. Two trends can be observed overall. The rental segment of 5 - 8 EUR/m² has been getting smaller and smaller with a declining overall volume for years, while the rental segment above 14 EUR/m² is taking up more and more space. The introduction of the rent cap (which is gone now) and Corona have accelerated the development. Since the end of 2018 at the latest, a slowing of the rental trend has been observed.
Housing Numbers in Berlin
There are almost 340,000 residential buildings in Berlin with about 2 million apartments, the majority of them in multi-storey buildings with 3 or more units. About 1.5 million apartments in Berlin are rented. Around 340,000 units, including apartments in detached and semi-detached houses, are used by the owners themselves.
Property Prices in Berlin
Property prices in Berlin have been rising linearly for more than 10 years. With rising prices, the supply is simultaneously decreasing. A significant dent in supply is measurable in 2019 with the introduction of the rent cap and in the Corona year 2020.
In 2010, the median offer price for Berlin real estate was around 1,550 EUR/m². As of 30.07.2021 it is at 5,130 EUR/m² for portfolio properties with year of construction until 2015.
|Period||Existing buildings Median Offer price||Index (base 10 years = 100)||New buildings Median Offer price||Index (base 10 years = 100)|
|Current quarter||5,130 EUR/m²||-||7,380 EUR/m²||-|
|1 Year||4,860 EUR/m²||5.50 %||6,520 EUR/m²||13.20 %|
|3 Years||3,940 EUR/m²||30.10 %||6,040 EUR/m²||22.30 %|
|5 Years||3,110 EUR/m²||64.70 %||4,800 EUR/m²||53.60 %|
|10 Years||1,690 EUR/m²||202.90 %||3,140 EUR/m²||134.90 %|
Bird's eye view of the overall market
In the bubblechart you can see all offers of the past 12 months clustered by construction year classes, apartment sizes and offer prices. Select the year of construction classes that you want to be displayed.
In the new building segment the median list price is currently about 7,100 EUR/m². There have been approximately 5,340 properties on offer in the period of one year. New building projects are on average priced at 13.20 % higher than a year ago.
Evolution of price segments
For our analysis we classify the supply market into four price segments. It can be seen that for years, parallel to the price increase, there has been a reduction in the number of offers and a shift from the lower price segment to the two main middle segments. In the course of the restrictive letting policy, a slight flattening of the curve can be observed since 2020.
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Rental Housing Market in Berlin
The upward trend in rents in Berlin is slowing down. In our analyses, we take into account the rental offers of the main portals and daily newspapers in Berlin. Since municipal housing companies brokering rental offers via internal channels, it must be assumed that the median value of the rents offered on the free market calculated by us would be lower if the municipal portfolio were added.
Rents in new constructions
Rents are the major discussion topic in Berlin. The reasons for the sharp increases in recent years are not only to be found in the scarcity of supply and the slow pace of new construction. Significantly higher construction costs and land prices are playing a key role in the development of rental prices and purchase prices. Accordingly, rents have developed in the new construction segment. New contract rents are currently advertised at a median rent of 19.95 EUR/m², which corresponds to a price adjustment of about 12.10 % compared to the same period last year, based on 6,300 offers in 12 months. Within the last 5 years the cold rents in new buildings thus developed by about 62.90 %.
Large parts of the housing stock are heavily deteriorated as a result of many years of letting. Prior to the introduction of the rent cap, rented apartments were therefore often extensively renovated before new rentals were made. Since the introduction of the rent cap in February 2020, more and more rented flats have been re-let without modernisation.
According to our analyses, in the last 12 months about 39,380 rental apartments (existing units) were offered for re-rental. The new contract rents advertised during this period averaged around a median of 12.05 EUR/m². This corresponds to a price adjustment of about 7.20 % compared to the same period of the previous year. Within the last 5 years the new contract rents in Berlin developed by about 42.90 %.
Offer rents, free housing market Berlin
|Period||Existing buildings Median Offer price||Index (base 10 years = 100)||New buildings Median Offer price||Index (base 10 years = 100)|
|Current quarter||13.35 EUR/m²||-||19.95 EUR/m²||-|
|1 Year||11.20 EUR/m²||18.90 %||17.80 EUR/m²||12.10 %|
|3 Years||11.00 EUR/m²||21.10 %||15.45 EUR/m²||29.20 %|
|5 Years||9.30 EUR/m²||42.90 %||12.25 EUR/m²||62.90 %|
The Bubble Chart shows the supply situation of the last 12 months on the property market in Charlottenburg. The colors mark the year of construction classes, the size of the bubbles the quantity of offers, the location in the coordinate system price radius (square meters) and apartment sizes.
The chart shows the changes in the price structure of the district based on four price segments. A clear shift can also be seen in the rental price segments. In the 12-month period about 39,380 existing apartments were offered on the market for new rentals. We register the largest number of offers in the medium price segments of 8 - 11 EUR/m² and 11 - 14 EUR/m². In recent years, we have registered a significant increase in the higher price segments.
Rental market Berlin: Short-term development of rents (new rentals)
In the course of 12 months, seasonal fluctuations and possible effects of regulatory measures become visible.
Not Enough Construction Activity
According to our calculations, there are currently about 205,000 units lacking to cover housing needs in Berlin. We calculate the deficit from the difference between the ratio of the number of inhabitants to the statistical household size, minus the housing stock. The size of the boxes refers to the number of inhabitants of the districts, the colour signals the percentage housing deficit related to the existing housing stock.
Housing Construction in Berlin
The shortage situation on the Berlin housing market cannot only be explained by the influx of new residents. A look at the past shows that the waves of immigration were based on an overhang of demand that was already high. In 2013, there were about 3.470 million registered residents in Berlin. With a statistical household size of 1.76 persons, the arithmetical demand at that time was 1.971 million apartments. The capital was already lacking around 88,600 apartments at that point - and since then Berlin has continued to grow.
Construction map Berlin
Our analyses show the construction completion reports since 2001 (source: Amt für Statistik Berlin-Brandenburg). We have aggregated the figures available at LOR level up to the old districts.
Preserved areas according to §172 BauGB (Baugesetzbuch), usually shortened to the term "Milieuschutz" (protection of the milieu), have developed from an original urban planning instrument to a political one. For owners, landlords and sellers, milieu protection is a central issue besides the rent cap. The preservation statutes intervene in almost every phase of a real estate engagement. Many owners are surprised by Milieuschutz, as its development is not transparent. Please also visit our milieu protection section, where you will find an overview of our services. By means of our milieu protection map, you can check whether your property is located in a conservation area according to § 172 BauGB, or in an investigation or observation area. We continuously check all relevant resolutions of the BVV (local parliaments) and update our environmental protection map.
Prospects for 2021
There are few countries that have done as well as Germany in the now easing crisis of the Covid 19 virus pandemic. Even if the price development has slown down a little bit, Berlin has kept its strengths. Paradoxically, the regulatory measures in the rental market will also have a positive influence on further development, because in Berlin investors can already build on experience and a fixed set of rules, while in other countries in the wake of regulation is yet to come. Invest in Berlin real estate now.
The structures of the population with a migration background in Berlin are very heterogeneous, due to the historically divergent developments prior to the reunification. Even today, the international percentage of the population in the western part of the city is almost three times as high as in the eastern districts. Social spatial patterns are recognizable both with regard to the proportion of migrants in the total population of the districts and neighbourhoods and with regard to their origin. In our map, you can filter by nationality and display the proportion of your selection at district and LOR level.
The population of Berlin currently consists of about 200 nationalities. In addition to 2,992,150 citizens of German nationality (as of 2019), the German capital is developing its dynamism and cultural diversity in interacting with foreign citizens. The chart shows the composition of the foreign population by nationality.
Berlin's attractiveness is expressed in the fact that its composition is constantly changing. Here we show where people are currently coming from and what the interaction between the districts is like.
- All migrations
This report was last updated on 30.07.2021 .
The Guthmann Market Report is a semi-automated report about the property market in Berlin. All information has been carefully researched and is given to the best of our knowledge and belief. We assume no liability for completeness, deviations, changes and errors. Our report does not represent an investment recommendation.
Amt für Statistik Berlin-Brandenburg: Einwohnerregisterstatistik (Bewegungsdaten), Fortschreibung des Wohngebäude- und Wohnungsbestandes, Ergebnisse des Haushaltegenerierungsverfahren KOSIS-HHGen, Baufertigstellungen. IMV GmbH: Rohdaten Preise und Mieten. Senatsverwaltung für Stadtentwicklung und Wohnen: Umwandlungsdaten (2018), Geoportal Berlin (FIS-Broker). Immobilienverband Deutschland IVD (2018/2019): Immobilienpreisservice 2018/2019.
Housing deficit (Treemap): The Statistics Office updates the household data based on the 2011 micro-census. Determination of household count and statistical household size via household generation procedures (KOSIS). We calculate the real household size / housing deficits via the ratio number of inhabitants to number of apartments.
Purchase prices and rents (charts and reports): Calculation of the median on the basis of raw data, own visualization.
Migrations: Aggregation and visualization based on transaction data.