Berlin Property Report
2025

Market Insights: Berlin's Real Estate Landscape in Transition

Dear Readers,

The data from the first quarter of 2025 indicates a potential turning point in Berlin's real estate market. After an extended consolidation phase, we're now seeing the first signs of market recovery:

Key Indicators at a Glance:

• Asking prices for existing properties: €5,500/m² (+3.40% year-over-year)
• Actual transaction prices for existing properties: €4,980/m² (-3% year-over-year)
• Asking prices for new developments: €8,420/m² (+3.20% year-over-year)
• Actual transaction prices for new developments: €7,980/m² (+2% year-over-year)
• Asking rents for existing properties: €16.85/m² (+14.10% year-over-year)

Spatial Development: Asking prices are rising again in 12 of Berlin's 21 traditional districts, with the majority of existing property market activity still concentrated within the S-Bahn ring. New development is increasingly shifting to more peripheral locations with larger development potential. According to our analysis, as of 14.03.2025 , the average asking price for existing properties stands at 5,500 EUR/m². The median actual selling price for an existing apartment is €4,980/m², based on our analysis of 11,371 notarized transactions.

New developments are reaching an average asking price of 8,420 EUR/m² and €7,980/m² in actual transactions. This represents an increase in asking prices of 3.20 %, while actual purchase prices are lagging slightly behind at approximately 3%. This is based on 1,464 transactions completed in 2024. Further details on the relationship between asking prices and actual transaction prices can be found later in this report.

This long-term development underscores the importance of strategic holding periods, particularly with regard to tax-free sales after a 10-year holding period or with appropriate owner-occupancy.

Negotiation Margin: The gap between asking and actual purchase prices currently stands at around 6% and is slightly increasing after a temporary narrowing. This reflects sellers' optimistic position, while buyers continue to exercise caution and leverage negotiation opportunities.

Market-Determining Factors and Structural Drivers: The sustained price growth since the 2010s is based on fundamental factors:

• Continuous population growth through migration
• Internationalization of the investor base
• Urbanization trends
• Limited supply due to land scarcity and lengthy approval processes
• General price pressure
• Supply constraints due to regulatory interventions

Rental Segment: Demand pressure in the rental segment remains consistently high. Asking rents continue to rise, and there is a significant gap between existing and new contract rents. This is confirmed by the latest census data. More details on existing and new contract rent levels can be found below.

Political Outlook: The impact of the recent federal election and the new government under Friedrich Merz on Berlin's real estate market is not yet fully assessable. However, we can expect economic policy initiatives that may affect financing conditions and tax frameworks.

In Summary: Berlin's real estate market is showing signs of stabilization with a slightly positive trend. The recovery is starting from a generally lower price level and will likely progress more slowly than the price increases of the past. For investors and owner-occupiers, the current market phase offers interesting entry opportunities, but requires careful analysis of individual properties and locations.

GUTHMANN® provides the optimal foundation for informed real estate decisions in this dynamic market phase with its network of over 300,000 annual visitors, comprehensive market data, and current transaction analyses.

Yours sincerely,

Peter Guthmann

Development and status quo

The rise in property prices in Berlin in the early 2010s is the result of a complex constellation of structural and economic factors. Berlin has been experiencing sustained growth since at least the end of the first decade of the 2000s. 
The attractiveness of the German capital and the resulting national and international investor interest, combined with comparatively low property prices, led to a run on Berlin's housing and real estate market. Continued population growth, mainly driven by immigration, fuelled demand for housing. Urbanisation trends reinforced this effect. At the same time, the European Central Bank's expansionary monetary policy provided favourable financing conditions through low interest rates, which increased the attractiveness of real estate as an asset class.

At the same time, supply fell short of rising demand. The availability of building land and lengthy approval procedures for residential construction led to a structural bottleneck, further pushing up prices. In many neighbourhoods, regulatory processes also contributed to a further shortage.  

The price increase in the 2010s is the result of a combination of increased attractiveness, population growth, favourable financing conditions, supply bottlenecks and increased investor demand. This development has had a lasting impact on Berlin, changing the social structure of many neighbourhoods. 

Small margin between offer and closing price

The difference between the asking price and the notarised closing price is currently around 6% and rising slightly after a temporary convergence. This reflects the sellers optimism, who are less cautious about entering the market in view of falling interest rates for loans. At the same time, it is clear that buyers are still acting cautiously and taking advantage of the scope for negotiation. The spread between asking and closing prices varies widely based on property type, condition and location.

From insider tip to knowledge metropolis

After the first phase of its transformation from an isolated city ruled by the Berlin Wall to a hip cultural metropolis, the direction for the coming decades of the German capital is becoming clear. Unlike specialised regions such as Silicon Valley or industry-dependent hubs such as 'car cities' or purely academic regions, Berlin brings together players from all sectors. Pharmaceuticals, consulting, fashion, the digital economy, literature, art and culture. Berlin's transformation is broad-based and therefore sustainable and innovative. Not surprisingly, Berlin's universities are among the world's most sought-after places to study and do research, generating further demand. 

Exogenous factors

The COVID-19 pandemic resulted in a rise in property prices in Berlin, fuelled by low interest rates and an increased focus on quality of living and working from home. The average price per square metre rose from €4,350/m² at the start of 2020 to €4,980/m² at the start of 2021. The war in Ukraine starting 2022 increased uncertainty, pushed up inflation and led to a shift in interest rates. Rising financing costs curbed demand, resulting in a slight decline in existing prices per square metre from €5,360/m² in 2023 to the current level of €5,010/m² in the last quarter of 2024. The downward trend has clearly come to a halt in both the new-build and existing property segments.

Decline in purchases since 2015 - stabilisation in new construction, uncertainty in existing properties

The number of notarised sales has been declining since 2015 and stood at around 9,700 sales in the last quarter of 2024, of which around 8,600 were for existing properties and around 1,100 for new builds. In both segments, the slump in sales with the start of the war in Ukraine and the resulting inflation and interest rate problems is very clear. Sales of new apartments have recently stabilised, while the outlook for the existing building segment is still unclear.

Average purchase prices

Property prices in Berlin are highly location-dependent and vary significantly within Macro, Midi and Micro locations. The administrative districts are followed by the old districts, i.e. the neighbourhoods. In these districts, we record prices in detail – from the district level down to the block level. Our analyses are based on data from the Berlin Property Appraisal Committee. The average values cover all apartment types and purchase cases and provide a location analysis that does not replace an individual valuation. The GUTHMANN® valuation tool and the experienced Guthmann Estate team are at your disposal for a valuation specifically tailored to your property, flat or apartment building.

Existing Properties

In terms of districts, there is a price corridor of around 5,600 to 5,800 euros in the segment of existing flats from the south-west to the centre to the north of Berlin. An average flat in these districts measures between 70 and 76 square metres and costs on average between 420,000 and 445,000 euros. The cheapest flats are located in Spandau.

New builds

Newly built apartments in central city locations are no longer available for less than EUR 10,000/m² on average. In special micro-locations, prices can also be well above the average. The highest prices per square metre in 2024 are found in the area around Oranienburger Strasse, Savignyplatz and Ludwigkirchplatz.

Rental Housing Market Berlin

Berlin's rental market is influenced by factors such as immigration, population growth and housing policy measures. Over the past 20 years, Berlin has undergone significant changes as a result of rising demand and falling vacancy rates. Many neighbourhoods have developed into districts that are now known for their high quality of life, diversity and popularity.

With the focus on regulating existing rents rather than new construction, more and more rental housing has been taken off the market. This trend began with neighbourhood protection and culminated with the rent cap, which, despite its short duration, significantly reduced the supply of rental housing and created great uncertainty for many landlords. The current regulations also discourage new construction and restrict free pricing, which has contributed to the release of large housing stocks in other markets. With existing rents rising only very slowly, there is no incentive to downsize, so large apartments are increasingly occupied by small households. As it is difficult for many owners to rent out flats indefinitely in an economically viable way, many flats are sold or - entirely legally - rented out on a temporary basis.

The result of the GWZ (building and housing census) of the 2022 census shows how low existing rents in Berlin actually are.

Average ‘absolute’ rents

At least as important as the rents per square metre are the average total net rents, which were also surveyed in the 2022 census and are shown here on a map. Interestingly, in addition to the very central areas of the city centre, Berlin's peripheral districts are also divided into higher rent ranges.

Trend

The most frequently asked question we receive is about the future development of the real estate market. Our analyses, which for the first time are based solely on transaction data, reflect the market's supply and demand situation with minimal time lag.

For the coming quarters, we can confidently expect a final stabilization of purchase prices. However, the development within segments may be more or less driven by interest rates. The market for vacant apartments has already picked up significantly and is close to pre-war levels in terms of price and transaction volume. Rented apartments as investments are more strongly influenced by the interest rate environment. Especially in this segment, a significant recovery is expected for 2025, as increased rents and slowly declining construction interest rates create an attractive investment environment.

Multi-family houses, particularly Berlin's rental buildings, have recently experienced a decline in both quantity, price, and quality factors. Due to the same reasons as for rented apartments, the price trend will reverse very quickly and point upwards.

Regardless of the segment you are interested in, you can continue to rely on our expertise, our analyses, our buyer network, and our international reputation.