Last update: 11.10.2019

Berlin Property Market 2019

In Berlin, not only the purchase prices and rents have risen, but also the challenges for the stakeholders. Nowhere else in Germany is the framework for engagement so tight and nowhere else does the public sector act with so much leeway in interpreting regulations and laws against investors. In order to be successful even under increasingly difficult conditions, you need reliable information and the right partner. We are one of the leading companies in Berlin when it comes to sales and acquisitions in regulatory scenarios.

Berlin property market at a glance

Anyone focusing on the real estate market in Berlin will identify a complex situation. On the one hand, Berlin is increasing considerably in speed and dynamism and is developing into an international location for science and research. Berlin occupies a top position among start-ups and millennials, ahead of London, New York or Amsterdam. The economy, wages and employment are all growing as a result of the continuing influx of people. These are ideal conditions for a booming real estate market.
On the other hand, there is regulation at work. More and more milieu protection areas, the pre-purchase practice of the districts, the conversion ordinance, expropriation debates and, last but not least, the decision on the rent cap (rent cover) do not remain without effect. However, regulation can at best dampen market rules, but not stop or repeal them. And since rents and purchase prices in the German capital are low by international standards and demand remains unbroken, no reversal is to be expected as long as the Senate does not build enough housing. As always, there is one limitation: under increasingly difficult conditions, buyers no longer make purchasing decisions as easy as they did a year or two ago. The profitability of an acquisition is more critically assessed and sellers have to undergo a reality check. Overall, prices are rising more slowly.
Those who recognize that there is a "new normal" can prepare for it. Our market report is intended to provide you with an initial orientation. We believe that there are no real estate agents in Berlin who deal with the market in our depth of detail and breadth of knowledge. We are both generalists and specialists. We are at your disposal for your individual requirements.

Guthmann Estate. Much more than just brokers.

Existing buildings

Median Asking price
4,600 EUR/m²
+14.30 %
Median Asking rent
11.50 EUR/m²
+3.40 %

New buildings

Median Asking price
6,380 EUR/m²
+4.20 %
Median Asking rent
17.25 EUR/m²
+12.00 %

Housing supply is not growing

The main driving force on the real estate market in Berlin is population growth through immigration. A growing city needs a growing real estate market. In Berlin, however, there is already a high shortfall on the housing market. According to our calculations, there are currently about 205,000 units missing to meet current needs. We calculate the deficit by dividing the number of inhabitants by the statistical size of the household. We subtract the result from the actual stock and obtain the deficit, which we subdivide into districts as seen below. The size of the cuboids refers to the number of inhabitants of the districts, the color indicates the percentage of housing deficit related to the existing housing stock.

Price development Berlin

The purchase prices in Berlin have developed upwards. Looking at the city, the following situation arose in the 10-year period:

Price index Berlin

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Today 4,600 EUR/m² - 6,380 EUR/m² -
1 Year 4,020 EUR/m² 14.30 % 6,120 EUR/m² 4.20 %
3 Years 3,240 EUR/m² 42.20 % 4,990 EUR/m² 27.80 %
5 Years 2,580 EUR/m² 78.50 % 3,770 EUR/m² 69.30 %
10 Years 1,540 EUR/m² 199.40 % 2,810 EUR/m² 126.70 %

12 months Berlin

The birds eye view of the Berlin real estate market over the past 12 months shows how prices are influenced by years of construction, locations, occupancy rates, condition and other factors. We cluster the market according to construction year class and show in the diagram the supply distribution according to size and square metre prices. For reasons of clarity, we set the upper limits at an apartment size of 300 m² and a price per square metre of 12,000 EUR/m². You can deselect the construction year classes in the menu. You can find this analysis at local level in the carrier route reports. 

Existing apartments and new buildings

In Berlin, in the past 12 months about 33,600 existing apartments have been advertised. The median is currently about 4,600 EUR/m². The price correction compared to the same period last year is thus approx. 14.30 %. In the new building segment the median for all locations and apartment types is currently about 5,980 EUR/m²,measured by 6,270 offers. New building projects are on average priced at 4.20 % higher than a year ago.

Evolution of price segments

For our analysis, we split the supply market into four price segments. It can be seen that a reduction in the number of offers and a shift from the lower price segment to the middle and higher segments has been taking place in parallel with the price increase since years. There is no sign of the trend slowing down, but an increasing price differentiation by location is becoming visible. The trend in the segments varies across the districts. Local analyses can be found in our district reports.

Berlin Properties: Short-term development of quoted prices

In the course of 12 months, seasonal fluctuations and possible effects of regulatory measures become visible. The effects are only slightly pronounced when considered over the entire urban area.

Rents

The rise in rents in Berlin has slowed down. In our analyses we examine the rental offers of the most popular portals and daily newspapers in Berlin. Communal housing associations are starting to broker rental offers via internal channels. It can be assumed that the median value determined by us would be lower if the municipal offer 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. In privately financed residential construction, about 50 percent of the production costs come from the main building costs and ancillary costs. Across all construction sections, construction work has increased considerably within 10 years. Approximately 30 per cent are at the expense of the building ground, for which the prices have increased up to five times within five years. In addition to property and construction costs, developers also have to factor in capital costs and financial risks. In total, even subsidised rents in the often cited target corridor of 6.50 EUR/m² to 10.00 EUR/m² cannot be realised under the aforementioned conditions in new buildings.

Accordingly, rents have developed in the new construction segment. New contract rents are currently advertised at a median rent of 15.85 EUR/m², which corresponds to a price adjustment of about 5.70 % compared to the same period last year, based on 5,700 Offers in 12 months. Within the last 5 years the cold rents in new buildings thus developed by about 33.40 %

Rents in existing housing

Rents for existing housing are also rising against the background of scarcity. In addition, part of Berlin's housing stock shows more or less strong signs of degradation. After many years of letting, in which only maintenance measures were possible, extensive modernisation is often necessary before new lettings can be made. The associated investments must be balanced by higher rents. Plans for more far-reaching regulatory measures, which force landlords to anticipate rent adjustments, are also having the effect of boosting rents. A recent example are initiatives for a rental moratorium.

According to our analyses, in the last 12 months about 76,000 rental apartments (existing units) were offered for re-rental. The new contract rents advertised during this period averaged around a median of 11.15 EUR/m². This corresponds to a price adjustment of about 2.00 % compared to the same period of the previous year. Within the last 5 years the new contract rents in Berlin developed by about 35.60 %.

Rent index Berlin

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Today 11.50 EUR/m² - 17.25 EUR/m² -
1 Year 11.15 EUR/m² 3.40 % 15.40 EUR/m² 12.00 %
3 Years 9.55 EUR/m² 20.80 % 12.50 EUR/m² 37.70 %
5 Years 8.50 EUR/m² 35.60 % 11.75 EUR/m² 46.70 %

Snapshot

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.

Rent evolution

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 76,000 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.

Milieu protection

Conservation areas in accordance with §172 BauGB (Building Code), usually abbreviated to the term " milieu protection ", have developed from originally urban to political instruments. As more and more milieu protection areas are being introduced in Berlin, we will not list them here. For owners and sellers, milieu protection has become a central issue alongside the rent cover. The maintenance statutes intervene in almost every phase of a real estate engagement. Many owners are being surprised by the protection of the environment, as its establishment is not transparent. What the Senate and districts regard as the strongest instrument against speculation in housing on the Berlin real estate market poses considerable problems for owners of apartment buildings in areas subject to regulations. Please visit our milieu protection service page, where you will find an overview of our services. In our milieu protection map below you can check whether your property is located in a conservation area according to § 172 BauGB, or in an investigation or observation area. We constantly check the minutes of the district assemblies for relevant developments.

Population mix

The population of Berlin currently consists of about 195 nationalities. In addition to 2,999,676 citizens of German nationality (as of 2018), 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.

Migration

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
  • International
  • National
  • Suburban
  • Binnen

General conditions

The basic conditions for real estate investments in Berlin are good, although they are always balanced between supply shortages and market regulation. In inner-city locations in particular, the city and districts are relying on regulatory market intervention to dampen purchase prices and rents. In addition to the introduction of further milieu protection areas, the so-called rent cap was adopted in June 2019, which is intended to freeze rents in Berlin for a period of 5 years. Our team will be happy to advise you on all aspects of milieu protection and the handling of real estate in milieu protection.

Despite increasingly difficult political circumstances, the Berlin real estate market remains a sought-after investment location. The price increases in Berlin are primarily based on catch-up effects and scarcity. As long as supply cannot keep pace with demand, government market intervention will be able to dampen, but not stop, the development of rents and purchase prices. According to the 2019 rent index, the annual rent increase in Berlin is currently 2.5 percent per year. This shows that the rent brake introduced in 2015 is taking effect. With the introduction of the rent cap, rents in Berlin have been frozen as from June 2019. Without the construction of a sufficient number of new dwellings, however, state policy will not succeed in significantly easing the pressure on the housing market.

This report was last updated on 11.10.2019 .

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.