Berlin real estate market in times of Coronomics
The only normality in Berlin is that nothing is normal at the moment. The truth is: The Corona crisis is hitting the property market hard. Faced with the threat of SARS-CoV-2, people are not making investment decisions, but are concerned about the health of their families and themselves. The rest is done by the no-contact policy, since the real estate market thrives on the interaction between the parties involved: viewings, consultation by real estate agents, bank and notary appointments. If nothing goes on in Berlin, nothing goes on the Berlin real estate market.
The Corona crisis was not to be expected; all the harder landlords are hit by it. Anyone who has previously had to deal with the consequences of the Berlin Senate's rent policy orgy will now have to reckon with rent losses due to the expected liquidity shortages of thousands of tenants. About 506,000 of about 1,450,000 rental apartments in Berlin are rented by private individuals. These include families, small self-employed persons and many pensioners, for whom rental income is often the most important income component. The federal government has reflexively put up a protective umbrella for tenants and, equally reflexively, has not thought of landlords. The landlords now have to defer rent payments by law and can only hope to get their hands on the outstanding debts by 2022. This can hit those who are dependent on the rents because they live on them or are in the crossfire at the bank themselves.
The good news is that housing is always needed and real estate has always proved to be the safest form of investment in previous crises. And where there is a crisis, there is also a time afterwards. When, where and how the real estate market in Berlin comes back to life, you can find out with us. We therefore not only continue our comprehensive Berlin Market Report, but also add many interesting data to it. Weekly updated transaction data for rents and purchase prices in Berlin, current immigration figures and highly interesting blog posts will help you through the crisis period. If you are thinking about selling, you can't find a better real estate agent in Berlin than us. We would also be happy to advise you by telephone, video conference or e-mail. We look forward to your contact.
Take care of yourself!
Your Peter Guthmann, Managing Director
Sharp decline in new offerings
The corona virus creates new realities. A litmus test for the market state is the number of new insertions per week, which we here analyse. Within 10 weeks, the rental offers in Berlin have fallen by two thirds, the sales offers by clearly more than half. For reference we display the insertions from 2019. The rental offers started to drop already from calendar week 6, which indicates a connection with the rent cap from 23.02.2020 as well.Header: Sharp decline in new offerings.
Rents in Berlin (offered rents) over the year
Rental housing market for non-price-bound apartments in Berlin at a glance with price segments and total number of apartments offered (portals, newspapers).
Property prices in Berlin (offer prices) over the year
The supply market for apartments in Berlin at a glance with price segments and total number of apartments offered.
Housing stock in Berlin
At the end of 2018 there were almost 327,000 residential buildings in Berlin with about 1.95 million apartments, the majority of them in multi-storey buildings with 3 or more units. About 1.45 million apartments in Berlin are rented, status 2018. Around 337,000 units, including apartments in detached and semi-detached houses, are used by the owners themselves.
Construction not fast enough
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.
Price development Berlin
Looking at the city, the following development of the median asking prices in the portfolio segment and in new construction over the 10-year period can be seen.
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||4,770 EUR/m²||-||6,180 EUR/m²||-|
|1 Year||4,340 EUR/m²||9.90 %||6,160 EUR/m²||0.30 %|
|3 Years||3,500 EUR/m²||36.20 %||5,300 EUR/m²||16.70 %|
|5 Years||2,810 EUR/m²||69.60 %||4,110 EUR/m²||50.20 %|
|10 Years||1,560 EUR/m²||206.50 %||2,840 EUR/m²||117.80 %|
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 31,770 existing apartments have been advertised. The median is currently about 4,770 EUR/m². The price correction compared to the same period last year is thus approx. 9.90 %. In the new building segment the median for all locations and apartment types is currently about 6,010 EUR/m². There were approximately 5,210 properties on offer in the period of one year. New building projects are on average priced at 0.30 % higher than a year ago.
Evolution of price segments
We break down the supply market into four price segments for our analysis. It becomes apparent 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 middle main segments. In the course of the restrictive rental policy, a slowdown of the trend can be observed in 2020.
Berlin Properties: Short-term development of quoted prices
In the course of 12 months, seasonal fluctuations and effects of regulatory measures become visible.
Rental prices in Berlin
The rise in rents in Berlin has stopped. In our analyses, we include the rental offers of the common portals and daily newspapers in Berlin.
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 17.15 EUR/m², which corresponds to a price adjustment of about 16.00 % compared to the same period last year, based on 6,010 offers in 12 months. Within the last 5 years the cold rents in new buildings thus developed by about 47.60 %.
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 67,920 rental apartments (existing units) were offered for re-rental. The new contract rents advertised during this period averaged around a median of 11.30 EUR/m². This corresponds to a price adjustment of about 2.20 % compared to the same period of the previous year. Within the last 5 years the new contract rents in Berlin developed by about 29.50 %.
Two rents in Berlin: German Civil Code (BGB) and rent cap
The rent cap means that two rents apply in Berlin. Since the law is limited to a five-year term and there is the possibility that it will fail at the Federal Constitutional Court, landlords must ensure when concluding new rental agreements that the rent permitted under the German Civil Code will flow after expiration or in the event of failure. This is only applicable when the rent in rental agreements continues to be based on the German Civil Code (BGB), but only the rent cap rent is demanded during the period of the law's effect.
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||11.45 EUR/m²||-||17.15 EUR/m²||-|
|1 Year||11.00 EUR/m²||4.20 %||14.80 EUR/m²||16.00 %|
|3 Years||10.05 EUR/m²||14.10 %||13.65 EUR/m²||25.60 %|
|5 Years||8.85 EUR/m²||29.50 %||11.60 EUR/m²||47.60 %|
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 67,920 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.
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 2020
The general conditions on the Berlin real estate market have become noticeably gloomier in the first quarter of 2020. Value increases, as we know them from the more than ten-year housing boom in Berlin, are not expected in the current year. Many factors depend on how long the crisis caused by the coronavirus will continue. At present (March 2020), property prices and rents in Berlin are moving sideways to declining. If the economy should permanently deteriorate as a result of the crisis, a consolidation on the Berlin real estate market cannot be excluded. Nevertheless, there is a solid demand situation that is noticeably present despite the crisis mode. Berlin real estate remains on the agenda for both local buyers and international investors.
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 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.
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 03.04.2020 .
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.