Update: 23.02.2024

Real Estate Report
Berlin Q1
2024

Buy or sell, act or wait? Berlin's real estate market is currently at a crossroads, presenting both challenges and opportunities. With mortgage rates slightly dropping and inflation easing, there's a mix of dynamics at play. Rent increases in Berlin are about 11.90 % from last year, whereas buying prices have decreased by -3.20 %. As of 23.02.2024 , an apartment's average cost in Berlin is 5,320 EUR/m² EUR/m². Explore these trends in depth with our specialized reports on Berlin and all 22 districts.

Between Brake and Boom

Dear Readers,

In Berlin, real estate market has faced challenges for almost wo years now. As of 23.02.2024 , offer prices have fallen by -3.20 % year-on-year, reflecting higher interest rates and leading to longer sales periods, a build-up of listings, and increased buyer price sensitivity. Yet, the Berlin Valuation Committee notes only a minor 4% drop in certified average values for 2023 compared to 2022. New construction prices barely changed (-0.03%), with a 50% drop in closings, while existing properties saw around 21% less transactions.

This scenario sets a stage for investment, with rising rents and a secure long-term demand amidst high interest rates beginning to show signs of a market shift. Banks are offering more attractive terms, and cash buyers are actively purchasing.

2024 looks promising for dynamic market activity, with a narrowing window for affordable deals, favorable interest rates, increasing returns, and more negotiable sellers.

This report covers several topics, including Berlin's apartment vacancies, highlighting a significant number of non-market-active apartments. Upcoming 2022 census results might spark a debate on incentives versus coercion.

We also showcase rental potential across Berlin's districts and neighborhoods and map out new construction projects, offering our services for those interested in these developments.

The Berlin investment property market is gaining traction in 2024, with more deals and an average factor of 27.

Our team remains a steadfast partner in navigating the fluctuating market, ready to transform real estate challenges into opportunities.

Yours sincerely,

Peter Guthmann
Managing Director

Districts at a Glance

2023 was characterized by market pressure and corrections. Some price declines were retractions of last-minute price increases, while others reflect the location and quality profile of the inventory. The market dynamics have diversified more than in previous years. Interestingly, the certified (sold) purchase prices of new construction properties have remained stable, while the list prices have been slightly adjusted to market conditions.

District Existing properties 12 month price development Existing properties Median offer price New properties 12 month price development New properties Median offer price
Charlottenburg
+2.10 % 6,160 EUR/m²
-10.40 % 9,900 EUR/m²
Friedrichshain
+2.90 % 5,860 EUR/m²
-4.50 % 9,130 EUR/m²
Köpenick
-4.80 % 4,600 EUR/m²
-10.40 % 7,050 EUR/m²
Kreuzberg
-6.30 % 6,490 EUR/m²
-6.00 % 9,930 EUR/m²
Lichtenberg
-2.40 % 4,530 EUR/m²
+1.50 % 6,740 EUR/m²
Marzahn-Hellersdorf
-10.30 % 3,800 EUR/m²
-1.20 % 5,280 EUR/m²
Mitte
-9.20 % 8,060 EUR/m²
-9.80 % 11,720 EUR/m²
Moabit
-2.10 % 5,250 EUR/m²
-13.40 % 9,150 EUR/m²
Neukölln
-7.70 % 4,520 EUR/m²
+10.50 % 8,500 EUR/m²
Pankow
-5.20 % 4,780 EUR/m²
-6.10 % 7,180 EUR/m²
Prenzlauer Berg
-0.90 % 6,710 EUR/m²
-3.20 % 11,460 EUR/m²
Reinickendorf
-4.10 % 4,150 EUR/m²
-1.50 % 7,130 EUR/m²
Schöneberg
-2.00 % 5,750 EUR/m²
+2.90 % 11,180 EUR/m²
Spandau
-2.70 % 3,950 EUR/m²
+2.10 % 6,290 EUR/m²
Steglitz
-0.70 % 4,870 EUR/m²
-7.60 % 7,560 EUR/m²
Tempelhof
-1.20 % 4,380 EUR/m²
-5.50 % 6,340 EUR/m²
Tiergarten
+5.50 % 8,360 EUR/m²
-18.50 % 10,000 EUR/m²
Treptow
-5.70 % 4,120 EUR/m²
-4.10 % 6,170 EUR/m²
Wedding
-5.10 % 4,400 EUR/m²
-4.50 % 7,400 EUR/m²
Weißensee
-3.60 % 4,730 EUR/m²
-3.40 % 8,360 EUR/m²
Wilmersdorf
-0.90 % 6,500 EUR/m²
+12.50 % 11,300 EUR/m²
Zehlendorf
-12.10 % 5,270 EUR/m²
+11.10 % 11,200 EUR/m²

Existing Properties

The property market in Berlin moved only upwards for over twelve years. A long phase of low interest rates, influx of new residents, catch-up potential, and a significant housing deficit kept the market in an upward swing. Twelve years ago, the median square meter price for an apartment in Berlin was around 1,890 EUR/m², while today comparable properties are valued at around 5,320 EUR/m². This corresponds to an increase in value of about 181.40 % over 12 years. Owners who financed their properties ten years ago could not yet benefit from the lowest interest rates, which only fell below 2% in 2016. Those who require follow-up financing for a purchase from 2014 in 2024 will not suffer an interest rate shock.

Status Quo for Existing Properties

In the offer market, we identified a development of -3.20 % compared to the previous year across all Berlin districts and construction year classes, except for new buildings. According to the Berlin Valuation Committee, the average certified square meter price in 2023 is 5,105 EUR/m². The offer value determined by us is 5,320 EUR/m². Therefore, the difference between the offer and the closing price is about 6 percent. This price elasticity varies greatly by district and location. In terms of the number of transactions, the decline was greatest in Pankow and least in Lichtenberg.

Certified Average Values for Existing Properties in 2022 and 2023

District Mitte Friedrichshain-Kreuzberg Pankow Charlottenburg-Wilmersdorf Spandau Steglitz-Zehlendorf Tempelhof-Schöneberg Neukölln Treptow-Köpenick Marzahn-Hellersdorf Lichtenberg Reinickendorf Berlin
2022 Average
Sale Price EUR/m²
5.976 6.024 5.933 6.169 3.595 5.092 4.917 4.923 4.231 3.733 4.403 4.128 5.344
2023 Average
Sale Price EUR/m²
5.844 5.844 5.623 5.906 3.457 4.793 4.699 4.653 4.179 3.503 4.382 3.994 5.105
Difference -2% -3% -5% -4% -4% -6% -4% -5% -1% -6% 0% -3% -4%
2022 No.
Transactions
1.258 1.266 1.238 1.565 464 1.037 1.239 748 551 142 317 512 10.337
2023 No.
Transactions
974 1.044 884 1.144 390 797 931 661 447 108 307 436 8.123
Difference -23% -18% -29% -27% -16% -23% -25% -12% -19% -24% -3% -15% -21%

Realignment in the Investment Market

The investment market for existing apartments in Berlin might pick up again in 2024 after a consolidation phase. Several signs indicate that the price pause is already coming to an end. Firstly, high construction costs are limiting new construction and housing supply. Additionally, the conversion ban (in German "Aufteilungsverbot") is preventing new units from split ownership according to the Condominium Act from entering the market. Apartments exiting the seven-year tenant-purchase period are only partially meeting the demand. At the same time, yields are improving due to rising rents and price corrections from 2023. Following the European Central Bank's recent decision not to raise the key interest rate further, market participants are anticipating lower interest rates in 2024. Last but not least, many purchasing decisions have been postponed due to interest rates, which are now accumulating and waiting for the right moment.

Price Index Berlin

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Current quarter 5,320 EUR/m² - 8,000 EUR/m² -
1 Year 5,490 EUR/m² -3.20 % 8,540 EUR/m² -6.40 %
3 Years 5,050 EUR/m² 5.30 % 6,860 EUR/m² 16.60 %
5 Years 4,240 EUR/m² 25.50 % 6,140 EUR/m² 30.20 %
10 Years 2,450 EUR/m² 117.40 % 3,610 EUR/m² 121.60 %

Basic Correction in 2022

In Berlin, property purchase prices have fluctuated only seasonally for years. In mid-2022, for the first time in a long while, there was a slight decrease in prices, although a slight slowdown had been noticeable since the end of 2019. The mid-2022 price dip is likely a correction of advanced, expectation-based price increases.

Longer Marketing Periods and Increased number of Listings

Three price segments dominate the market for existing properties in Berlin. The price corrections from 2022 and 2023 have strengthened the lower price segment. Marketing times have lengthened, which is currently leading to a slight supply overhang. The chart shows the property listings on ImmoScout24.

Clustering by Construction Years and Apartment Sizes

The bubble chart visualizes the purchase offers, clustered by construction year classes, apartment sizes, and offer prices. The upper limit is set at 350 m² of living space and 15,000 EUR/m². Select the construction year classes to be displayed from the menu.

New Constructions

Closures Halved

2023 was not an easy year for the new construction sector. We examined not only the number of sales contract completions but also the development of list prices and certified purchase prices. Additionally, we were interested in the stage of development and the number of ongoing housing construction projects. Price adjustments in new construction projects are rather unusual. Indeed, the average certified square meter price in 2023 across all of Berlin remained at the previous year's level. As of our research on December 13, 2023, 1,029 apartments from ongoing projects were sold in 2023. In 2022, there were 2,063 units.

Certified Average Values for New Construction Properties in 2022 and 2023

District Mitte Friedrichshain-Kreuzberg Pankow Charlottenburg-Wilmersdorf Spandau Steglitz-Zehlendorf Tempelhof-Schöneberg Neukölln Treptow-Köpenick Marzahn-Hellersdorf Lichtenberg Reinickendorf Berlin
2022 Average
Sales Prices EUR/m²
10.764 8.908 7.231 9.873 6.561 7.782 8.970 7.318 8.043 5.240 6.399 7.069 7.922
2023 Average
Sales Prices EUR/m²
10.329 9.872 7.027 11.297 6.364 9.030 7.437 5.687 8.435 4.840 6.132 6.096 7.919
Difference -4% 11% -3% 14% -3% 16% -17% -22% 5% -8% -4% -14% 0%
2022 No. Transactions 108 205 362 153 126 52 216 7 465 115 198 56 2.063
2023 No. Transactions 52 124 123 43 69 32 83 8 290 42 111 52 1.029
Difference -52% -40% -66% -72% -45% -38% -62% 14% -38% -63% -44% -7% -50%

Development, Dynamics, and East-West Differences

New construction, alongside deregulation, remains the appropriate means to combat the housing shortage, promoting socially balanced development of neighborhoods and "Kieze" (local neighborhoods), and preventing demographic stagnation. After construction activity in Berlin until around 2010 focused on the renovation of old buildings, the second decade saw rapid growth in new construction activity. Initially, land reserves in the eastern part of the city with larger building plots were activated. In the following years, activity in the eastern part increasingly focused on large projects, while in the western part of the capital, many infill developments took place. Entire urban quarters grew in Treptow-Köpenick and Lichtenberg. The significant spatial concentration of new construction activities in Berlin's eastern districts is not only due to land reserves but also to simpler building law prerequisites. In contrast to the western districts, where the "Baunutzungsplan" (Land Use Plan) applies, in the eastern districts, primarily §34 of the "Baugesetzbuch" (BauGB, Building Code) is applied.

Conversion as a Complement to New Construction

In Berlin, with one of the lowest homeownership rates in Germany at around 16%, more and more tenants are aspiring to own property due to the fundamentally scarce rental offerings. This trend reflects the desire for security and retirement provision. Purchasing one's own rented apartment offers an alternative to more expensive new constructions and has the advantage of maintaining the spatial connection. Although the Berlin Constitution generally supports the creation of homeownership, conversion bans and milieu protection areas hinder property formation by stopping or complicating conversions, even though significant potential relief for the rental housing market lies in this segment. The map on the right side shows conversion activity in Berlin since 2011, while the left side displays new construction activity.

2022 and 2023: New Construction Dip Due to Cost and Interest Burden

Despite a price correction of about -6.40 % compared to the previous year, the high level of interest rates and increased equity requirements present a hurdle for many buyers. The price development in recent years has been driven less by margins and more by more expensive land and higher planning and construction costs. Ten years ago, the average list price per square meter for a new apartment in Berlin was 3,610 EUR/m², and it currently stands at 8,000 EUR/m², approximately 121.60 % higher. In 2013, financings were completed at an average interest rate of 2.64 percent. Follow-up financings in 2023 are costing an average of about 3.88 percent so far this year.

Challenges of the Pandemic, Supply Chains, Ukraine War, and Inflation

Already during the Corona pandemic, the construction industry experienced staff outflows and disruptions in supply chains, resulting in rising construction costs. Scarcity of primary and building materials and soaring energy costs due to the Ukraine war increased cost pressure. Most recently, inflation led to a shift in interest rates, resulting in higher construction financing rates. Project financing is becoming unbalanced. At the same time, sales are stagnating due to consumers' interest rate-induced reluctance to buy, who are also faced with higher equity requirements from banks in addition to more expensive loans.

Current Discussion, Planning, and Construction Activities in Berlin

What projects are currently being discussed, planned, or are already underway? Our map shows the current status of construction activity in Berlin. Is your project not included? Please contact us with information.

We have identified and classified numerous residential construction projects from various sources. Our overview map presents these projects, categorized by their development stage and with information on the number of planned housing units. It provides a quick view of whether a project is in the discussion, planning, or construction phase. In total, over 330 projects of various sizes have been recorded throughout the city of Berlin. Approximately one-third of these projects are currently in the discussion or preliminary planning stage, while around 130 are in the active construction phase.

Regulation Reduces Rental Offers

Developments in the rental market are influenced by factors such as migrations, population growth, homeownership rates, monetary policy, crises, and housing policy. Over the past 20 years, Berlin has undergone a wave of transformations. People moved to the German capital from all over the world, attracted by rents that were comparatively low on the international scale. Demand increased, vacancy rates decreased, and rents rose. After a period of stagnation, the population grew, and neighborhoods ("Quartiere") evolved into "Kieze" (local neighborhoods) known for their quality of life, diversity, and popularity. This is Berlin today.

During the 17-year tenure of left-wing coalition governments in Berlin, which focused on protecting the population from changes rather than primarily on creating new living space, the previously relaxed rental housing market gradually developed into a fundamental shortage of supply. This development, which began with "Milieuschutz" (social environment protection), culminated in the "Mietendeckel" (rent cap). Although the rent cap was short-lived until its judicial repeal, it significantly reduced the number of rental apartments available in Berlin. From the landlords' perspective, this project particularly undermined trust in legal certainty. As a result, after the introduction of the rent cap at the end of 2019, more and more available rental apartments were withdrawn from the market, either by being sold or only rented out on a temporary and furnished basis.

Status Quo

The rental market situation remains tense. Current market dynamics and the interest rate environment continue to put pressure on the already limited supply. Rising financing costs and higher equity requirements make purchasing a home more expensive, leading to increased demand in the rental sector. Additionally, the growing fragmentation of the rental market is making it more difficult to find housing.

  1. According to the 2023 "Mietspiegel" (rent index), the average rent for existing apartments in Berlin is 7.16 euros per square meter. The validity of this value is highly controversial. With the introduction of a qualified rent index in 2024, an increase in the average rent level of at least 10 percent is expected.
  2. In the standard rental market below 20 EUR/m², our calculations show the average rent in the current quarter is 13.65 EUR/m². The increase compared to the same period last year is about 11.90 %.
  3. Rents for new apartments and temporary rentals are currently averaging 31.40 EUR/m².

Rent Index Berlin

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Current quarter 13.65 EUR/m² - 31.40 EUR/m² -
1 Year 12.20 EUR/m² 11.90 % 23.50 EUR/m² 33.70 %
3 Years 10.15 EUR/m² 34.70 % 17.70 EUR/m² 77.50 %
5 Years 10.95 EUR/m² 24.30 % 15.55 EUR/m² 101.60 %

Attempt to Estimate the Housing Shortage

Determining the exact extent of the housing shortage in Berlin is challenging. However, comparing household numbers with housing stocks reveals the pressure in the local housing market. The "Treemap" exposes another fundamental problem of the scarce rental housing market through the calculated household size: The lack of alternatives for shrinking households leads to blocked trickle-down effects and exacerbates the housing issue because aging households cannot downsize. This results in large apartments being under-occupied and small apartments being over-occupied.

The Treemap displays the aggregated situation in the districts. Clicking on the districts takes you to the neighborhood level, and the back button returns you to the overall view. The red-green scale quantitatively shows the need, and the size of the boxes corresponds to the size of the local housing markets.

According to this method, there is a total housing deficit of approximately 112,000 units with a decreasing pressure from west to east. Some districts in East Berlin theoretically even have low fluctuation reserves. In the districts of Pankow, Köpenick, and Marzahn-Hellersdorf, the housing market is almost balanced, except for some neighborhoods.

Reactivating Vacancies Through Deregulation

Is Berlin's acute housing problem characterized not only by a physical shortage but also by a high number of non-market active apartments? Survey results from the years 2011 (Census) and 2018 (Microcensus) indicate that the vacancy rate in the city might be higher than officially assumed. The 2022 Census vacancy figures are not yet available but may provide insights into this issue.

While the statistics from the Census and Microcensus provide imprecise figures, Berlin's extensive rent regulation evidently removes thousands of units from the rental market by economically pushing owners towards selling or furnished renting. Relaxing legal regulations, such as reverting to a nationwide 20 percent capping limit or issuing a real "Mietspiegel" (rent index), could invigorate the housing market and improve the availability of apartments.

Statistical census Vacancy rate in the districts

 Apartments Vacant / No rented Vacancy Rate
Friedrichshain-Kreuzberg 145.673 4.339 2,98%
Pankow 208.078 6.196 2,98%
Neukölln 161.694 5.735 3,55%
Treptow-Köpenick 131.501 3.586 2,73%
Marzahn-Hellersdorf 131.654 5.440 4,13%
Lichtenberg 144.971 4.694 3,24%
Reinickendorf 128.875 5.923 4,60%
Charlottenburg-Wilmersdorf 181.166 5.985 3,30%
Spandau 116.975 5.210 4,45%
Steglitz-Zehlendorf 153.798 5.780 3,76%
Tempelhof-Schöneberg 180.002 5.949 3,30%
Source: Statistik Berlin Brandenburg, Zensus 2011

Rents for New Construction Units

The asking rents for new-build flats in Berlin currently average around 28.85 EUR/m², which corresponds to a price adjustment of around (Konnte keine Ergebnisse erhalten) compared to the same period last year. In 5 years, rents in new builds have thus increased by around (Konnte keine Ergebnisse erhalten)

Clustering of rental offers by year of construction and flat size (12 months)

The Bubblechart visualises the rental offers clustered by year of construction classes, flat sizes and asking rents. Select the year of construction classes to be displayed in the menu. Status 23.02.2024 , median asking rents for existing and new builds.

Average Asking Rents by Districts

Development of asking rents in Berlin's districts. The asking rents are calculated retrospectively for three months in each case. Capping for existing properties at EUR 20/m². 

District Existing properties 12 month price development Existing properties Median offer price New properties 12 month price development New properties Median offer price
Charlottenburg
+13.90 % 17.55 EUR/m²
-5.70 % 27.35 EUR/m²
Friedrichshain
+10.30 % 14.90 EUR/m²
+10.00 % 28.55 EUR/m²
Köpenick
+2.10 % 12.50 EUR/m²
+72.20 % 32.65 EUR/m²
Kreuzberg
+1.40 % 13.00 EUR/m²
-4.60 % 24.95 EUR/m²
Lichtenberg
+12.00 % 13.20 EUR/m²
+4.80 % 19.95 EUR/m²
Marzahn-Hellersdorf
+6.30 % 10.60 EUR/m²
+9.10 % 17.45 EUR/m²
Mitte
+6.00 % 16.50 EUR/m²
-15.00 % 30.85 EUR/m²
Moabit
+16.00 % 14.90 EUR/m²
-28.40 % 26.75 EUR/m²
Neukölln
+12.70 % 13.05 EUR/m²
+3.70 % 20.75 EUR/m²
Pankow
+2.20 % 12.35 EUR/m²
-6.70 % 22.00 EUR/m²
Prenzlauer Berg
+8.80 % 15.00 EUR/m²
-14.80 % 23.85 EUR/m²
Reinickendorf
+15.40 % 12.35 EUR/m²
+10.00 % 22.00 EUR/m²
Schöneberg
+4.10 % 14.00 EUR/m²
-2.90 % 27.75 EUR/m²
Spandau
+11.00 % 10.70 EUR/m²
-2.80 % 18.35 EUR/m²
Steglitz
+8.20 % 13.80 EUR/m²
+18.50 % 23.90 EUR/m²
Tempelhof
+13.60 % 12.25 EUR/m²
+24.50 % 21.95 EUR/m²
Tiergarten
+15.10 % 16.65 EUR/m²
+4.40 % 30.00 EUR/m²
Treptow
+22.10 % 13.45 EUR/m²
+7.10 % 21.55 EUR/m²
Wedding
+16.90 % 13.00 EUR/m²
-3.60 % 24.10 EUR/m²
Weißensee
+3.60 % 14.40 EUR/m²
+80.20 % 39.05 EUR/m²
Wilmersdorf
+2.90 % 15.35 EUR/m²
-12.40 % 26.15 EUR/m²
Zehlendorf
+12.60 % 14.65 EUR/m²
-43.40 % 22.60 EUR/m²

Building Blocks

Shortly ahead of the turn of the year 2024, a consolidated Berlin apartment block market is gaining momentum again. Rental houses are entering the coming year with more deals and an average factor of 27. However, not all locations and construction year classes are reacting in the same way to the challenging interest rate environment and the energy transition. The direct market value of a rental property is determined by rental income, location, condition and energy efficiency. The indirect factors here are also the change in interest rates, high equity requirements and the potential offered by the influx of new tenants. 

Market Dynamics and Price development

Our report records the sales figures of apartment buildings in the Berlin districts in the period from 2006 to 29 September 2023. 574 sales of residential and commercial buildings were registered up to this date. Purchase price information was already available for 202 of these sales. Compared to the previous quarters, there has been a significant increase in market momentum, with factors and purchase prices now moving sideways at a generally lower level.

Based on the relevant floor space, the average price for apartment buildings in Berlin is currently around EUR 2,189 per square metre. In terms of living space, the average price is around EUR 2,845 per square metre.

Average Price Level for Apartment Blocks by District

District ø 2019* ø 2020* ø 2021* ø 2022* ø 2023* ø 2023**
Neukölln 1919 1831 1884 1996 2283 2967
Mitte 3472 3006 3528 3910 3511 4560
Tiergarten 1899 2062 1941 2275 1593 2070
Wedding 1936 1891 1968 1902 1643 2135
Prenzlauer Berg 3528 2314 2456 3059 1879 2442
Friedrichshain 2419 2149 2231 2320 1957 2544
Kreuzberg 2030 1992 2128 2326 1956 2542
Charlottenburg 2424 2489 3227 2650 2190 2847
Spandau 1604 1597 1830 1946 1627 2115
Wilmersdorf 2989 2601 3334 2804 3131 4070
Zehlendorf 3403 4224 4463 3092 3000 3900
Schöneberg 2126 2042 2361 2611 1747 2270
Steglitz 2244 2193 2093 2606 1914 2490
Tempelhof 2073 1822 2195 2322 1943 2525
Weißensee 2153 1712 2067 2230 2640 3432
Pankow 1674 1938 1983 2332 2639 3430
Reinickendorf 1765 1829 2163 2086 2042 2654
Marzahn 1896 2494 2359 2215 2544 3300
Hohenschönhausen 1679 1919 2732 2116 2193 2850
Hellersdorf 1851 2293 2500 2682 1977 2570
Gesamt Berlin 2040 1945 2167 2327 2189 2845
Average price level in €/m² *value-relevant floor space and **residential space for rental apartment buildings including properties with semi-commercial use.

After prices for apartment buildings in Berlin have risen across the entire city in recent years, there is currently a greater differentiation by location and quality. We have used data from the Berlin Expert Committee to determine the average price level and price ranges for the 22 old districts of Berlin. Across Berlin as a whole, the average asking price for residential and commercial properties was 2,189 EUR/m² of value-relevant floor space. 

Price Ranges by Districts

Year Mitte Tiergarten Wedding Prenzlauer Berg Friedrichshain Kreuzberg Charlottenburg Spandau Wilmersdorf Zehlendorf Schöneberg Steglitz Tempelhof Neukölln Treptow Köpenick Lichtenberg Weißensee Pankow Reinickendorf Marzahn Hohenschönhausen Hellersdorf Jahr
2018 1.267 bis 5.247 1.255 bis 4.447 950 bis 3.004 1.582 bis 3.510 888 bis 5.793 1.165 bis 5.655 1.350 bis 6.401 301 bis 11.919 1.048 bis 5.366 1.526 bis 7.453 1.068 bis 3.089 1.065 bis 3.687 983 bis 2.817 695 bis 4.849 1.062 bis 3.873 1.081 bis 2.066 844 bis 4.840 805 bis 2.379 468 bis 4.652 570 bis 5.695 1.350 bis 2.959 500 bis 2.097 857 bis 2.320 2018
2019 1.208 bis 6.168 1.425 bis 3.647 874 bis 3.154 1.461 bis 4.964 1.395 bis 3.404 1.082 bis 4.197 1.423 bis 11.340 606 bis 3.192 1.601 bis 9.143 2.446 bis 5.173 1.314 bis 3.917 1.164 bis 4.071 862 bis 5.997 1.032 bis 2.941 1.318 bis 2.656 1.579 bis 2.650 698 bis 4.630 1.000 bis 3.376 671 bis 3.090 396 bis 4.839 1.018 bis 2.339 1.382 bis 2.028 846 bis 3.858 2019
2020 1.594 bis 8.481 1.454 bis 2.811 1.003 bis 4.084 1.310 bis 3.280 1.248 bis 3.284 1.424 bis 4.894 1.364 bis 6.181 431 bis 5.758 1.151 bis 10.526 3.230 bis 4.837 1.363 bis 4.841 1.637 bis 3.183 770 bis 4.909 592 bis 4.392 986 bis 4.069 930 bis 5.683 1.230 bis 5.748 1.126 bis 4.594 895 bis 2.819 654 bis 5.248 1.589 bis 3.255 1.729 bis 2.307 1.495 bis 3.090 2020
2021 1.603 bis 8.475 1.106 bis 3.422 841 bis 5.446 1.436 bis 6.835 1.314 bis 6.696 1.167 bis 4.264 1.570 bis 16.262 841 bis 4.633 1.596 bis 7.347 2.560 bis 6.944 1.625 bis 7.047 1.489 bis 5.253 1.125 bis 4.644 896 bis 6.326 1.794 bis 5.217 984 bis 5.812 1.142 bis 4.960 1.390 bis 3.167 1.109 bis 6.111 601 bis 3.873 2.006 bis 3.012 1.525 bis 4.482 1.248 bis 3.389 2021
2022 1.489 bis 16.844 1.193 bis 3.702 1.358 bis 3.867 347 bis 7.736 458 bis 3.141 862 bis 5.068 1.707 bis 6.579 472 bis 6.013 874 bis 7.043 1.976 bis 3.897 1.735 bis 4.707 1.799 bis 3.821 1.232 bis 3.670 824 bis 4.515 1.467 bis 2.931 1.716 bis 3.999 287 bis 6.116 1.691 bis 3.186 1.421 bis 5.626 954 bis 5.094 2.195 bis 2.733 1.081 bis 2.150 1.717 bis 4.312 2022
2023 2.158 bis 5.777 1.475 bis 1.750 919 bis 2.467 1.167 bis 2.964 1.374 bis 2.844 911 bis 6.567 1.093 bis 3.870 1.003 bis 4.608 203 bis 6.024 - 1.339 bis 1.993 1.827 bis 2.082 1.252 bis 2.570 886 bis 5.285 - 2.302 bis 3.520 357 bis 2.538 1.247 bis 5.177 1.424 bis 4.083 909 bis 4.065 1.266 bis 4.667 1.572 bis 3.585 1.425 bis 2.523 2023
Quelle: Gutachterausschuss Berlin, eigene Anfrage

Multipliers are stabilising

The "multiplier" or factor is a measure that indicates the ratio of the purchase price of a property to the annual net cold rent. It shows how many years it would take for the purchase of the property to be amortised by the rental income. The formula for this is: factor = purchase price / annual net cold rent. Due to the rise in interest rates in 2023, the profitability of property investments has decreased. In this situation, investors are increasingly basing their decisions on a combination of the quality of the location, the condition of the property and its development potential. The multiplier initially fell significantly in 2023, but has since stabilised.

Listings

It is generally not advisable to advertise an apartment building for sale openly on real estate listing sites. Many of these offers are difficult to sell, either because the asking price is too high or for other reasons. In addition, the asking price on property exchanges often does not reflect the actual market value. Nevertheless, we would like to show the development of apartment blocks offered on property exchanges in recent years. Our analysis reveals two key findings: Firstly, that the asking price is declining, and secondly, that although the number of openly offered properties has fallen considerably recently, it is still high in terms of overall turnover on the Berlin apartment block market. If you need support in getting out of the sales impasse of your property, please do not hesitate to contact us. We will develop an effective sales concept for your property.

Real Estate Market: Trends for 2024

After prices have fallen in almost all districts since mid-2022, asking prices for residential property in Berlin are currently settling at a lower level. They may have bottomed out. This is being driven indirectly by rising rents and the growing assumption that the ECB will not postpone interest rate cuts until the third or fourth quarter. In principle, the ECB has no direct influence on building interest rates. However, commercial banks are currently pricing the expectation of falling interest rates into falling construction interest rates. Pfandbriefe and government bonds are the investments that play an important role in this. Rents, in turn, are only a consequence of the unresolved housing problem in Berlin. Together with the influx of people with different motivations, there is no relief in sight. More influx, more demand, too little supply and the prospect of falling interest rates leave little room for further price reductions.

Everything therefore indicates that the property market in Berlin is coming to the end of its consolidation phase.

Investors with higher liquidity in particular are currently dominating the market. The prospects for investors are very good, particularly in the traditional market for rented flats.

In the apartment block segment, the easing of the energy turnaround and improved predictability of property investments are leading to a revival. Nevertheless, energy efficiency, overall condition and location factors remain decisive criteria when choosing a property. Buildings with a refurbishment backlog or energy efficiency deficits are priced into the market at a discount.

The new-build sector could see a noticeable recovery from the second half of 2024. The pressure on the rental market is too high for many consumers not to switch to ownership at a reasonable interest rate level. A recovery is also likely with regard to energy security and the regulatory environment for existing properties.

Legislators remain unpredictable with new approaches to further regulate the rental market. Above, we have shown the direct effect of the overturned rent cap on the rental supply.

European Central Bank Holds Rates Steady, Signals Peak in Interest Rate Cycle

In a series of ten adjustments, the European Central Bank (ECB) raised the benchmark interest rate to 4.50 percent and is now (as of February 2024) entering its third consecutive interest rate pause. The last time the benchmark interest rate in the Eurozone was near this level was in the summer of 2008, amid the international economic crisis, at 4.25 percent, slightly below the current rate. About six months later, the ECB began to lower the rate in several steps. Economists are increasingly of the opinion that the interest rate adjustment of September 14, 2023, marked the peak.

The projections from the International Monetary Fund (IMF) and the ECB regarding the potential further course of inflation are closely aligned. The ECB anticipates that inflation will decrease steadily but slowly over the coming years. Against the backdrop of decreasing cost pressure and the ECB's monetary policy, inflation is expected to fall to 2.7% in 2024 and 2.1% in 2025, potentially reaching 1.9% in 2026. According to these projections, inflation would return to the target corridor of just over 2 percent by 2025. Recently, mortgage rates have decreased by up to 1.2 percent for ten-year terms.

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This report was last updated on 23.02.2024 .

Disclaimer

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.

Sources

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.

Methodology

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.

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