Last update: 24.11.2021

Berlin Real Estate 2021

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Berlin Real Estate 2021

Rent caps, Corona, elections, regulation: nothing seems to be able to stop the development of prices and revenues on Berlin's real estate market at the moment. This is evidenced by the figures in the recently published 2021 semi-annual report of the Berlin Property Valuation Committee (Gutachterausschuss für Grundstückswerte in Berlin, GAA for short).  According to the report, property sales in the first six months of the year were roughly as high as in the same period of the previously record year 2019. 

Buyers place the highest confidence in Berlin's real estate market and acquire all property typologies from building land, office and commercial buildings to rented or freehold flats. In particular, sales of residential and commercial buildings and condominiums have increased. According to the report, there were 1,807 transactions in six months, up 45 per cent on the previous year. However, 2020 was considered a weak year. In monetary terms, the increase in condominium sales was around 66 per cent. This means that not only the offer prices have risen strongly again, but also the actual notarised sales prices of flats in Berlin. After notarisation, all sales contracts are submitted to the committee. This makes the expert committee an objective benchmark for the development of the property market in Berlin. 

The GAA figures also show that price resilience in Berlin, i.e. the margin between asking prices and notarised purchase prices, is low. According to the GAA, the average price level for first-time sales is 6,505 EUR/m². The Guthmann market report shows a median asking price of 6,990 EUR/m² for the past 12 months.

No end in sight for the boom?

After more than a decade of linear growth in Berlin's real estate market, it is tempting to simplify. For example, one could say "supply is short and prices continue to rise". But anyone who owns a property in Berlin knows that the reality in the German capital is more complex.

Regulation has been going on in Berlin for much longer than prices and rents have been rising. The first milieu protection areas ("Milieuschutzgebiet") date back to 1991, when the decision was made to move the German capital back to Berlin. Milieu protection, ironically, was supposed to protect the Berlin population from their parliamentary representatives moving from the former interim Capital Bonn to Berlin. Twenty years later, more than 60 milieu protection areas are in place. They would also have been an election campaign issue in 2021 if the Federal Council ("Bundesrat") had not passed the Building Land Mobilisation Act ("Baulandmobilisierungsgesetz"). This new regulation, which we discuss in this blog post, reduces the room for manoeuvre for apartment buildings. According to the new § 250 BauGB, anyone who wants to convert rental flats into owner-occupied flats in the future must obtain permission in areas with a tight housing market. For the time being, the law is limited until the end of 2025. Find out about the details in our apartment house report.

10 years of catching up

If you bought a flat in Berlin 10 years ago today, you will have probably paid a median price per square metre of just under 1,780 EUR/m². Exactly 10 years later on the same date in 2021, the same flat is offered at a median price per square metre of 5,170 EUR/m². This corresponds to an increase in value of around 190.00 %

Despite first sideways movements, there is no indication of a general trend turnaround. High demand meets scarce supply in Berlin. Figures from the Berlin Expert Committee (GAA) show that residential sales have been declining for years due to lack of supply. Whereas in 2015 around 24,600 sales contracts were notarised, in 2019 the figure was around 18,500 and in 2020 only around 17,500 residential notarisations per year.

Real Estate Prices in Berlin

As of 24.11.2021 , the median asking price for properties for sale in Berlin is around 5,170 EUR/m², which corresponds to a development of around 5.10 % compared to the same period a year ago. In 12 months, approximately 31,120 flats were advertised on the property portals. In new construction, the 12-month median list price is around 7,270 EUR/m². During this period, about 6,200 objects were brought to the market. The development of purchase prices is not homogeneous across all districts of Berlin. In some trend locations, market participants feel that the explosive increases of the past three years are exaggerated and are dampening the price expectations of sellers.    

Price Index Berlin

As of 24.11.2021 , median asking rents existing and new buildings.

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Current quarter 5,170 EUR/m² - 8,060 EUR/m² -
1 Year 4,920 EUR/m² 5.10 % 6,560 EUR/m² 22.80 %
3 Years 4,060 EUR/m² 27.30 % 6,090 EUR/m² 32.30 %
5 Years 3,270 EUR/m² 57.90 % 4,980 EUR/m² 61.60 %
10 Years 1,780 EUR/m² 190.00 % 3,220 EUR/m² 150.60 %
Data basis: IS24, Immowelt, Immonet offers, period: 24.11.2021 - 3 months, percentage changes compared with prior-year period

Offer market: clustering by year of construction and apartment sizes

  • Existing buildings: approx. 31,120 offers on IS24/Immowelt/Immonet 
  • New buildings: approx. 6,200 offers on IS24/Immowelt/Immonet 

The Bubblechart shows the purchase offers clustered according to year of construction, unit size and asking price. Upper limit at 300 m² living space and a 12,000 EUR/m². Choose the building year classes to be displayed in the menu.

Price development by districts

Asking prices develop very differently in the course of the year in Berlin's districts. We have calculated the asking prices based on the listings of the past three months and compared the value with the previous year's value.

District Existing properties 12 month price development Existing properties Median offer price New properties 12 month price development New properties Median offer price
Charlottenburg
-0.60 % 5,560 EUR/m²
+22.60 % 11,180 EUR/m²
Friedrichshain
+4.30 % 5,250 EUR/m²
+21.00 % 10,120 EUR/m²
Köpenick
+19.30 % 4,720 EUR/m²
+11.20 % 6,330 EUR/m²
Kreuzberg
+8.40 % 6,430 EUR/m²
+10.90 % 9,150 EUR/m²
Lichtenberg
+22.20 % 4,580 EUR/m²
+6.50 % 6,420 EUR/m²
Marzahn-Hellersdorf
+13.30 % 3,530 EUR/m²
+11.70 % 5,450 EUR/m²
Mitte
+20.10 % 8,310 EUR/m²
+10.80 % 9,770 EUR/m²
Moabit
+3.20 % 4,750 EUR/m²
+27.00 % 9,720 EUR/m²
Neukölln
+2.40 % 4,500 EUR/m²
+5.50 % 7,540 EUR/m²
Pankow
+0.30 % 4,500 EUR/m²
+16.10 % 6,490 EUR/m²
Prenzlauer Berg
+7.70 % 6,460 EUR/m²
+72.70 % 10,390 EUR/m²
Reinickendorf
+8.90 % 3,960 EUR/m²
+19.70 % 6,730 EUR/m²
Schöneberg
+14.10 % 5,530 EUR/m²
+20.40 % 9,030 EUR/m²
Spandau
+24.40 % 4,040 EUR/m²
+12.30 % 5,680 EUR/m²
Steglitz
+0.10 % 4,630 EUR/m²
+14.20 % 7,480 EUR/m²
Tempelhof
+9.50 % 4,360 EUR/m²
+15.40 % 6,150 EUR/m²
Tiergarten
+19.30 % 6,960 EUR/m²
+28.60 % 10,620 EUR/m²
Treptow
+20.10 % 4,280 EUR/m²
+13.30 % 6,270 EUR/m²
Wedding
+1.60 % 4,220 EUR/m²
+13.60 % 7,270 EUR/m²
Weißensee
-4.00 % 5,070 EUR/m²
+28.00 % 7,360 EUR/m²
Wilmersdorf
+6.00 % 6,330 EUR/m²
+5.40 % 9,010 EUR/m²
Zehlendorf
+6.50 % 5,550 EUR/m²
+7.10 % 9,290 EUR/m²

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Rental Housing Market in Berlin

In 2018 and 2019, the rental growth in Berlin's rental housing market had slowed down and moved sidewards in terms of rents. Recently, the price trend accelerated again. Existing flats built up to 2015 are currently being offered at a median rent of around 12.55 EUR/m², which corresponds to a development of around 6.70 % in 12 months. In 12 months median supply value is 12.50 EUR/m². In 5 years, the increase in asking rents in the stock thus amounted to approx. 31.20 %.  

Rents in new buildings

Offer rents currently average around 19.75 EUR/m², representing a year-over-year price adjustment of about 11.10 %, based on 4,650 Offers in 12 months. Within the last 5 years, the cold rents in new construction thus developed by about 57.00 %.

Price index rents Berlin

As of 24.11.2021 , median asking rents existing and new buildings.

Period Existing buildings Median Offer price Index (base 10 years = 100) New buildings Median Offer price Index (base 10 years = 100)
Current quarter 12.55 EUR/m² - 19.75 EUR/m² -
1 Year 11.75 EUR/m² 6.70 % 17.75 EUR/m² 11.10 %
3 Years 11.10 EUR/m² 12.90 % 15.30 EUR/m² 29.10 %
5 Years 9.55 EUR/m² 31.20 % 12.55 EUR/m² 57.00 %
Data basis: IS24, Immowelt, Immonet offers, period: 24.11.2021 - 3 months, percentage changes compared with prior-year period

Insertions in 12 months

  • Buildings with year of construction before 2015, approx.: 35,780 offers on IS24/Immowelt/Immonet 
  • New buildings with year of construction after 2015, approx.:. 4,200 offers on IS24/Immowelt/Immonet

The bubblechart shows rental offers clustered by construction year, apartment size and asking rent. Upper limit at 250m² and 30 EUR/m². Select the building year classes to be displayed in the menu.

Offer rents in the districts

Development of asking rents in Berlin over the course of the year. Asking rents are calculated retrospectively for three months at a time.

District Existing properties 12 month price development Existing properties Median offer price New properties 12 month price development New properties Median offer price
Charlottenburg
+4.80 % 15.65 EUR/m²
+19.90 % 25.20 EUR/m²
Friedrichshain
-6.40 % 16.65 EUR/m²
+9.20 % 22.75 EUR/m²
Köpenick
+5.90 % 12.70 EUR/m²
-4.50 % 15.30 EUR/m²
Kreuzberg
+5.80 % 16.60 EUR/m²
+36.10 % 28.65 EUR/m²
Lichtenberg
+7.10 % 10.75 EUR/m²
+17.70 % 17.60 EUR/m²
Marzahn-Hellersdorf
+9.20 % 9.30 EUR/m²
+14.90 % 12.50 EUR/m²
Mitte
+15.70 % 20.85 EUR/m²
+37.80 % 28.85 EUR/m²
Moabit
-17.80 % 15.40 EUR/m²
+28.60 % 22.50 EUR/m²
Neukölln
+13.40 % 11.55 EUR/m²
-4.00 % 17.95 EUR/m²
Pankow
+1.30 % 11.75 EUR/m²
+22.40 % 18.50 EUR/m²
Prenzlauer Berg
-1.60 % 16.30 EUR/m²
+1.80 % 22.10 EUR/m²
Reinickendorf
+9.50 % 10.00 EUR/m²
+4.20 % 16.60 EUR/m²
Schöneberg
+6.50 % 14.40 EUR/m²
+19.80 % 23.35 EUR/m²
Spandau
-2.20 % 8.45 EUR/m²
+15.90 % 15.90 EUR/m²
Steglitz
+11.80 % 12.50 EUR/m²
+21.30 % 19.20 EUR/m²
Tempelhof
+3.10 % 10.30 EUR/m²
+0.30 % 20.55 EUR/m²
Tiergarten
+12.10 % 20.15 EUR/m²
+12.80 % 22.05 EUR/m²
Treptow
+12.20 % 12.95 EUR/m²
+22.00 % 16.50 EUR/m²
Wedding
-0.50 % 11.95 EUR/m²
+18.00 % 21.95 EUR/m²
Weißensee
+24.30 % 13.70 EUR/m²
+16.20 % 17.60 EUR/m²
Wilmersdorf
+7.30 % 16.10 EUR/m²
+24.60 % 23.65 EUR/m²
Zehlendorf
+15.20 % 13.90 EUR/m²
+21.10 % 19.40 EUR/m²

Trend and Outlook

Real estate in Berlin continues to be in high favour with investors. Residential real estate in particular is in demand, as investments can be scaled from micro-investments to apartment buildings.

The interest in Berlin real estate follows several macro trends.

  • In the pandemic, residential properties in Berlin have proven to be crisis-resistant. As early as the beginning of 2020, it became apparent that Corona would not lead to a dip, but on the contrary to considerable price increases. The change in the way of working brought about by Corona has also led to a further surge in demand. Living rooms, kitchens and guest rooms have become home offices.

  • The fact that property prices in Berlin are also perceived by investors as being too high in some cases is overridden by the lack of investment alternatives. The issue of investment pressure has a dual effect on the development of prices. On the one hand, it increases the demand pressure on real estate, on the other hand, it tightens the supply because owners do not know how to invest sales profits.
  • Without the continuing high housing deficit, the situation in Berlin might be different. The market already tilted once, in the 1990s, from a seller's to a buyer's market. Currently, however, there are no parallels, because in the 1990s construction was based on inaccurate and far too optimistic growth forecasts. The influx of new residents turned out to be far less than hoped for and at times turned into a population decline. Today, however, depending on the respective estimate, Berlin lacks up to 200,000 flats for the existing population. Berlin has a real housing shortage.

  • International surveys among investors show that interest in real estate assets is very high despite decreasing yields. Institutional real estate investors also accept lower yields as long as the long-term increase in value over longer periods is guaranteed. This is also going hand in hand with a shift in investor profiles from private to institutional.

  • German locations are generally in high demand, while interest in other European countries has tended to decline during the pandemic. Among the German locations, Berlin is one of the top locations, along with Hamburg, Munich and Frankfurt and Leipzig. Existing regulations are increasingly seen as unavoidable, especially as regulatory measures are also increasingly being implemented in other cities and municipalities. Berlin's early pioneering role, with the introduction of conservation statutes (Milieuschutz), rent index, conversion ordinance and the most recent failed rent cap experiment, has ultimately led to the ordinances and laws becoming a new normality.

The fact that the investment climate is good and the willingness to invest is high does not prevent investors from being critical of the sometimes very high multipliers, especially in the market for multi-family houses, despite long-term strategies. Private buyers currently still benefit from a tax-free sale after the speculation period of 10 years. The regulation has already been put to the test repeatedly and it does not seem out of the question that the tax-free sale could be abolished. In Germany, an attempt was already made in 2003 under a red-green federal government to make capital gains on real estate taxable regardless of holding periods. It would be no surprise if the new coalition in the federal government were to make a quick decision here, especially since Germany is alone in Europe with the time limit regulation. In neighbouring Austria, the speculation period was already abandoned in 2012.

For institutional investors, which must tax capital gains differently anyway, the increased purchase prices put the state of the property under much more pressure than before. Sellers who have invested little or nothing in the substance and quality of the building must expect more intensive due diligence by interested parties in the future, especially in trendy locations.

Price-forming factors on the Berlin real estate market

Price-driving / stabilising effects Damping effects
Housing deficit Regulation
Forced shortage by regulation More regulation
Lack of investment alternatives Decreasing yields
Increasing migration from economically weaker regions Decreasing migration through
semester breaks and job cuts
Delayed processes for building permits Completion of large housing projects
Evasion from capital markets Regulation of
housing market
Evasion from
commercial to residential
 
Negative interest on cash Decreasing yields
Strongly rising construction costs Reduction of allocation of costs to tenants
Increasing ratio institutional buyers Decreasing ratio
private investors

Housing in Berlin

Lack of alternatives for households getting smaller leads to blocked trickle-down effects and further exacerbates Berlin's housing problem as aging and shrinking households encounter an empty housing market. Large apartments are under-occupied, small apartments are over-occupied. The housing deficit is not the same in all districts; within the S-Bahn ring, most units are lacking. Information on average household sizes in the boroughs is available from the Bureau of Statistics. Household sizes were last surveyed in the 2011 Census and have been statistically updated since then. Current figures are not published by the Office, so real household sizes in Berlin can only be estimated. We attempt a mathematical approximation by putting the numbers of reported households in relation to the number of apartments. The figures are available at the small-area statistical planning level LOR, which we aggregate to the old districts. The result is the following graph, which shows the excess demand in the districts. By excess demand, we mean the number of apartments that would be needed to meet the statistical household size.

There are almost 330,000 residential buildings in Berlin with about 2 million apartments, the majority of them in multi-storey buildings with 3 or more units. About 1.64 million apartments in Berlin are rented. Around 340,000 units, including apartments in detached and semi-detached houses, are used by the owners themselves. 

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. 

Milieu Protection

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.

Population

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.

Population mix

The population of Berlin currently consists of about 200 nationalities. In addition to 2,980,886 citizens of German nationality (as of 2020), 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 influx of new residents, whose composition is constantly changing. Since the motivation to register with the authorities as an in-migrant is greater than to de-register, population and in-migration figures always show changes. Many people are registered in Berlin without living here, others live here without being registered.

  • All migrations
  • International
  • National
  • Suburban
  • Inland

This report was last updated on 24.11.2021 .

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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