Last update: 18.09.2020

Berlin Property Market Report
2020

Welcome to the most comprehensive, up-to-date and detailed market report for Berlin real estate.

 

Housing market in Berlin is pushed by Corona

The Berlin housing market has not only survived the first corona wave unscathed, but the crisis seems to be leading to a refocusing on property values. Differently than expected initially, the pandemic does not interrupt the upward trend of real estate prices in Berlin, at most a deceleration of the price development can be observed. The number of properties on offer is also slowly increasing for the first time in years. From June 2019 to August 2020, the real estate supply in Berlin grew by about 35 percent. The offered prices are about 4,890 EUR/m² living space. 

Rent cover leads to less supply

Different from the market for properties for sale, the rental housing market remains far below the previous year's level in volume terms. Obviously, the introduction of the rent cap in February 2020 has led to a massive drop in the supply of rental housing in Berlin. Even before the rent cap, rents in Berlin had risen only moderately, recently by 3.50 % in the 12-month period. Measured across all real estate platforms, the median offered rent in the current quarter is 11.55 EUR/m²

Berlin property market at a glance

The calculation of prices is based on the housing offers of the past three months. We determine the median offer price on a continuous basis for all types of apartments.

Existing buildings

Median Asking price
4,890 EUR/m²
+6.70 %
Median Asking rent
11.55 EUR/m²
+3.50 %

New buildings

Median Asking price
6,540 EUR/m²
+3.30 %
Median Asking rent
18.05 EUR/m²
+7.00 %

Price development

For more than 10 years now, property prices in Berlin have been rising almost linearly. In 2010, the median offer price for Berlin real estate was around 1,550 EUR/m². As of 18.09.2020 it is at 4,890 EUR/m² for portfolio properties until the year of construction 2015. 

Development of offered rents in the portfolio segment since 2013

Since 2013, we have also been recording rental offers in Berlin. Two trends can be observed overall. The rental segment of 5 - 8 EUR/m² has been getting smaller and smaller with a declining overall volume for years, while the rental segment above 14 EUR/m² is taking up more and more space. The introduction of the rent cap and Corona have accelerated the development. 
Since the end of 2018 at the latest, a significant slowing of the rental trend has been observed.  

Development of rental offers in the new construction segment

Approximately three-quarters of the new building segment in Berlin is reserved for the rental segment from 14 EUR/m². All offers that are declared as new buildings in the stock exchanges are analysed. This includes some renovated old buildings.  

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. 

10-year index of purchase prices and rents

Looking at the city, the following development of the median supply prices in the portfolio segment and in new construction over the 10-year period is given:

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 4,890 EUR/m² - 6,540 EUR/m² -
1 Year 4,580 EUR/m² 6.70 % 6,340 EUR/m² 3.30 %
3 Years 3,660 EUR/m² 33.50 % 5,620 EUR/m² 16.50 %
5 Years 2,860 EUR/m² 71.10 % 4,310 EUR/m² 51.80 %
10 Years 1,600 EUR/m² 206.30 % 2,890 EUR/m² 126.40 %

Bird's eye view of the overall market

In the bubblechart we visualize the offers of the past 12 months clustered according to construction year classes, apartment sizes and offer prices. We set the upper limits at a flat size of 300 m² and a square metre price of 12,000 EUR/m². Select the year of construction classes to be displayed in the menu.

Portfolio (stock) apartments and new buildings

In Berlin, in the past 12 months about 33,670 existing apartments have been advertised. The median is currently about 4,890 EUR/m². The price correction compared to the same period last year is thus approx. 6.70 %. In the new building segment the median for all locations and apartment types is currently about 6,350 EUR/m². There were approximately 5,220 properties on offer in the period of one year. New building projects are on average priced at 3.30 % 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.

Rents in Berlin

The upward trend in rents in Berlin is slowing down notably. In our analyses, we take into account the rental offers of the usual portals and daily newspapers in Berlin. Since municipal housing companies are switching over to brokering rental offers via internal channels, it must be assumed that the median value of the rents offered on the free market calculated by us would be lower if the municipal portfolio 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. Accordingly, rents have developed in the new construction segment. New contract rents are currently advertised at a median rent of 18.05 EUR/m², which corresponds to a price adjustment of about 7.00 % compared to the same period last year, based on 7,170 offers in 12 months. Within the last 5 years the cold rents in new buildings thus developed by about 46.30 %

Portfolio rents

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 59,180 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 1.00 % compared to the same period of the previous year. Within the last 5 years the new contract rents in Berlin developed by about 32.60 %.

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 11.55 EUR/m² - 18.05 EUR/m² -
1 Year 11.15 EUR/m² 3.50 % 16.85 EUR/m² 7.00 %
3 Years 10.40 EUR/m² 10.70 % 13.90 EUR/m² 29.60 %
5 Years 8.70 EUR/m² 32.60 % 12.35 EUR/m² 46.30 %

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 59,180 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

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.

Please visit our milieu protection service page

Prospects for 2020

There are few countries that have done as well as Germany in the now easing crisis of the Covid 19 virus pandemic. Even if the real estate market in Berlin is in a sleep mode for the reasons mentioned above, Berlin will soon regain its strengths. Paradoxically, the regulatory measures in the rental market will also have a positive influence on further development, because in Berlin investors can already build on experience and a fixed set of rules, while in other countries in the wake of the crisis regulation is yet to come. Invest in Berlin real estate now.

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 2,992,150 citizens of German nationality (as of 2019), 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
  • Inland

This report was last updated on 18.09.2020 .

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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