Turnaround Ahead?
Dear readers,
After more than two years of stagnation in Berlin's real estate market, signs of a turning point are becoming clearer. Germany's inflation rate has dropped below the 2% mark for the first time, standing at 1.9%, and the ECB reduced the key deposit rate by 0.25 percentage points to 3.5% in its September meeting. Property prices have stabilized. Homeowners and investors are seizing the opportunity, reviving market activity under favorable entry conditions. Those with liquidity or secure financing are currently benefiting from highly advantageous circumstances.
While the market recovery is more noticeable in certain districts, it remains subdued in others. As of 13.09.2024 , the 12-month trend stands close to neutral at -0.40 %. Over a three-month period, we observe a rise of 0.10 %. Although price dynamics remain moderate overall, an upward trend is emerging.
Interest is also picking up again in the investment property segment. Investors are balancing interest rates with higher rental yields.
The new-build sector remains price-stable but continues to suffer from slowly recovering demand.
In the rental market, demand remains high, supply is limited, and offered rents have increased by 5.90 % year-over-year.
Districts at a glance
The asking price range for existing apartments in Berlin spans from just under 3,700 to 8,100 EUR/m². The highest prices are found in the Mitte district, followed by Tiergarten, Prenzlauer Berg, Kreuzberg, and Wilmersdorf. The most affordable apartments are in Marzahn-Hellersdorf and Spandau. A similar pattern is observed in new builds, with Mitte, Zehlendorf, and Prenzlauer Berg showing the highest price levels. The highest average rents for existing apartments are demanded in Charlottenburg. For new-build apartments, micro-apartments in Köpenick are the most expensive, followed by Mitte and Tiergarten.
Existing Properties
The market for existing properties in Berlin has seen continuous growth over the past twelve years. Low interest rates, significant migration, a fundamental housing deficit, and catch-up potential have driven the market. Ten years ago, the median price per square meter for an apartment in Berlin was approximately 2,570 EUR/m². Today, the same property would be offered for around 5,420 EUR/m².
Lower purchase prices offer new opportunities for investors.
Even after adjusting for the corrections of the past three years, the value appreciation of investment properties in Berlin over the 10-year period from 2014 to today is approximately 111 percent.
With a well-thought-out development strategy and modern management, properties in the German capital outperform virtually every other asset class, such as stocks, precious metals, or cryptocurrencies, in terms of security and returns. In addition to long-term value growth, real estate also provides cash flow and can be sold tax-free after 10 years. No other asset class offers a comparable peace of mind over these time frames.
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 | 5,420 EUR/m² | - | 8,460 EUR/m² | - |
| 1 Year | 5,440 EUR/m² | -0.40 % | 8,200 EUR/m² | 3.20 % |
| 3 Years | 5,130 EUR/m² | 5.60 % | 7,800 EUR/m² | 8.50 % |
| 5 Years | 4,580 EUR/m² | 18.30 % | 6,340 EUR/m² | 33.50 % |
| 10 Years | 2,570 EUR/m² | 110.90 % | 3,690 EUR/m² | 129.10 % |
The real estate market in Berlin has become significantly more expensive since 2014, particularly in the higher price segments. While the lower price segments (below 2,500 EUR/m²) continue to shrink, the higher-priced segments, especially in the 5,000–7,500 EUR/m² range and above, are expanding. The median price has more than doubled over the past ten years, driven by strong demand and fundamental shortages in Berlin. Despite rising prices, the overall number of available properties is declining.
Slightly longer marketing times
The number of listings has consistently declined over one decade. A significant price shift occurred in mid-2022, approximately three months after the start of the Ukraine war. Before this, there was a noticeable peak, likely a last-minute reaction by sellers in response to rapidly rising inflation. Overall, the decline in listings over the past 10 years is clearly visible. A backlog effect from slower sales can only be observed in certain local markets. The average listing time increased from 13.9 weeks in 2022 to 19.4 weeks in 2023.
Time on Market 2019 - 2023
| Year | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| ø Weeks on Market | 16.1 | 15.8 | 17.1 | 13.9 | 19.4 |
Overview of the Real Estate Market in Berlin
The chart presents all purchase listings by year of construction, apartment size (up to 350 m²), and listing price (up to 15,000 €/m²).
New Constructions
Challenges in the New-Build Sector
The past 24 months have been challenging for the new-build sector. As of 13.09.2024 , the 12-month development shows a positive trend at 3.20 %. In some districts, only a few units have been notarized, making precise price estimates difficult. Currently, the median price per square meter for new construction in Berlin is around 8,290 EUR/m².
Apartment Conversions Expand the Supply
In Berlin, only about one in six residents (16%) lives in their own home, one of the lowest homeownership rates in Germany. Many tenants seek to escape the highly competitive rental market and acquire property. Purchasing one’s rental apartment is a viable alternative to more expensive new builds, offering the advantage of remaining in a familiar environment. However, regulations such as the prohibition on apartment conversions and the preservation of social structures present challenges.
Less Sales Due to Rising Costs and Interest Rates
For many buyers, the higher equity requirements and high interest rates remain a challenge, despite higher wages and barely rising new-build prices. In recent years, the increase in new-build prices has not been driven by margins but by more expensive land and higher planning and construction costs.
Ten years ago, the median listing price per square meter for a new-build apartment in Berlin was 3,690 EUR/m², and it currently stands at 8,460 EUR/m², which is almost 129.10 % percent higher. Compared to the previous year, new-build apartments have increased in price by 3.20 %.
Current mortgage interest rates vary between 3.1% and 4.1%, depending on loan term and creditworthiness. For a 10-year fixed-rate mortgage, the interest rate is approximately 3.1% to 3.4%, while for a 20-year fixed-rate mortgage, the rate ranges from around 3.7% to 4.0%. These rates depend on factors such as the amount of equity and individual creditworthiness.
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.
Rental Housing Market Berlin
The Berlin rental market continues to be shaped by migration, population growth, low homeownership rates, and political regulation. The demand for housing is increasing, driven by internal migration and international arrivals. In many districts, simple neighborhoods are transforming into sought-after areas, while vacancy rates steadily decline and rents keep rising.
Government policies focus on regulating existing rental prices, which has reduced supply. Despite its failure, the rent cap has had a lasting impact on the availability of rental properties. Many apartments are now only being rented on a temporary basis.
Rent Index Berlin: Average of 7.21 Euros per Square Meter
According to the Berlin Rent Index 2024, the average rent for existing apartments stands at 7.21 euros per square meter, only 0.7% higher than in 2023. This indicates that the pressure is not on existing rents but rather on new lease agreements.
In the standard rental market, the current quarter’s asking rent is 14.70 EUR/m², an increase of 5.90 % compared to the same period last year. Approximately 45% of rental listings fall within this segment.
New-build apartments (first occupancy) and temporary rentals currently average 23.10 EUR/m². Slightly more than half (55%) of rental listings are in this segment.
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 | 14.70 EUR/m² | - | 23.10 EUR/m² | - |
| 1 Year | 13.90 EUR/m² | 5.90 % | 24.30 EUR/m² | -5.00 % |
| 3 Years | 12.50 EUR/m² | 18.00 % | 20.00 EUR/m² | 15.40 % |
| 5 Years | 10.95 EUR/m² | 34.20 % | 16.95 EUR/m² | 36.40 % |
Housing Shortage
The housing shortage in Berlin cannot be precisely quantified but can be visualized by comparing household numbers with available housing stock. The diagram highlights an additional core issue of the tight rental market through the calculated household size: there is a lack of alternatives for households that are shrinking in size. This situation blocks filtering effects and exacerbates the housing problem, as aging households are unable to downsize. Large apartments remain under-occupied, while small apartments are overcrowded.
By clicking on the districts, you can navigate to the neighborhood level, and the back button will return you to the overall overview. The red-green scale quantitatively illustrates demand, while 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.
Vacancy Rate
Is Berlin's acute housing problem solely a result of shortage, or is it also a vacancy issue? The 2022 Census data indicates around 41,000 units are unavailable on the housing market, with over 10,000 of these units vacant for more than 12 months. Berlin's extensive rental regulations appear to be removing thousands of units from the rental market, pushing property owners toward selling or offering furnished rentals for economic reasons. Easing regulatory requirements, such as reverting to the national cap of a 20 percent rent increase, could make renting out properties more attractive.
New Construction Rents
The asking rents for new-build flats in Berlin currently average around 26.45 EUR/m², which corresponds to a price adjustment of around -5.00 % compared to the same period last year. In 5 years, rents in new builds have thus increased by around 36.40 %.
Clustering of rental offers by year of construction and flat size (12 months)
The diagram 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 13.09.2024 , 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.
Apartment Blocks
In the third quarter of 2024, a consolidated Berlin multi-family housing market is regaining momentum. According to the Berlin Appraisal Committee, there were a total of 600 sales of residential and commercial buildings in the previous year. The current estimated average price-to-rent ratio is approximately 25.3, with an average price per square meter of 2,670 euros. More information can be found in our multi-family housing report.
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 |
Stabilizing Multipliers
The multiplier or factor is a metric that represents the ratio of a property's purchase price to its annual net cold rent. It indicates how many years it would take for the purchase of the property to pay off through rental income. The formula is: Factor = Purchase Price / Annual Net Cold Rent. Higher interest rates put pressure on profitability. In this context, investors are increasingly basing their decisions on a combination of location quality, the condition of the property, and its development potential.
Trend 2025
The negative price dynamics of the past three years have significantly weakened as of September 2024, with localized signs of positive trends. However, a clear upward trend across the city has yet to emerge, and further local price corrections remain possible. Rapid or strong growth is not expected in the short term, but potential interest rate cuts by the ECB could inject momentum. Market participants also anticipate strong business activity toward the end of the year, which could lead to a positive start in 2025. Institutional investors, who were more cautious in 2024, are likely to become more active again in 2025. Early signs of recovery are already visible among owner-occupiers, positively influencing buyer sentiment. Small investors are increasingly recognizing the opportunities presented by high-yield offerings and are acting more decisively, suspecting that this window may soon close.
This report was last updated on 13.09.2024 .
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.