Berlin is everything. Except boring.
Anyone looking at the real estate market in Berlin realises a complex situation. Supported by the influx, the economy, wages and employment are growing. Berlin is developing into an international location for science and research. The German capital is already occupying a leading position among start-ups and millennials, ahead of London, New York and Amsterdam. The Internet industry has developed into one of Berlin's fastest growing sectors alongside tourism and construction. All in all, these are excellent conditions for sustainable growth in the real estate market.
On the other hand, there is regulation. The dominant themes in 2019 were milieu protection, aggressive pre-purchase practices, the expropriation debate and, most recently, the decision on the rent cap. However, state politics and districts have made themselves bigger than they are. The Berlin housing associations can no longer be forced to make pre-emptive purchases, a cooperative that has made the headlines gets into financial difficulties and the rent cap may have been decided politically, but has little legal prospect of success. Also, far fewer tenants in Berlin seem to feel treated as unfairly as the coalition parties claim. The results of the Microcensus 2018 presented in November support this view.
In the end, it shows once again that Berlin is everything, except boring. Even 30 years after the fall of the Berlin Wall, the late effects of socialism, the Wall and the reunification of Germany continue to cause friction. But where else, if not in Berlin, do new perspectives, opportunities and possibilities open up every day after 30 years? It has remained the same: Berlin is "The place to be".
Enjoy reading our report.
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.
- A good third of Berlin's tenants live for rent from private companies, about 28 percent from housing associations and cooperatives.
- One quarter of the rented apartments are let by private individuals.
- Of the total housing stock, i.e. rented and owner-occupied units, private individuals account for approx. 36 percent.
The microcensus 2018 samples show that around 146,100 apartments are considered vacant. About 126,000 of these are residential buildings. Based on the total stock, 146,100 apartments correspond to a vacancy rate of approx. 7.5 percent. It must be added that the results of the microcensus 2018 are based on a sample of one (1) percent. The actual vacancy rate in Berlin will not become clear until the full survey is conducted in 2022. However, the figures seem to prove that the vacancy rate in Berlin is probably considerably higher than known.
Housing supply is not growing
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
Assigning the shortage situation on the Berlin housing market only to inflows is short-sighted. A look at the past shows that the waves of migration had already started on a high backlog in demand. In 2013, around 3.470 million inhabitants had been registered in Berlin. With a statistical household size of 1.76 persons, the arithmetical demand was 1.971 million apartments. The effective housing stock amounted to about 1.872 million units. This means that the capital was already lacking around 88,600 apartments in 2013 and Berlin has continued to grow since then. Urban planning must be credited with the fact that population development was inconsistent over decades and that the roots of the housing shortage go back to the 1990s, when after the fall of the Berlin Wall the abolition of state subsidies in the West and structural change in the East led to a brutal economic crisis. Berlin was literally deregistered and immigration came to an almost complete standstill. This was reflected in the population forecasts. Politicians and statistics at times assumed that Berlin would shrink to about 3.36 million inhabitants by 2020. The consequences were the dismantling of housing stock in the eastern part of the city and the privatisation of municipal housing. In the mid-2000s, the influx began to be moderate at first, but then rapidly increased, reaching its peak in 2016 with the refugee crisis.
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
The purchase prices in Berlin have developed upwards. Looking at the city, the following situation arose in the 10-year period:
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||4,710 EUR/m²||-||6,340 EUR/m²||-|
|1 Year||4,200 EUR/m²||12.20 %||6,090 EUR/m²||4.20 %|
|3 Years||3,400 EUR/m²||38.60 %||5,100 EUR/m²||24.30 %|
|5 Years||2,650 EUR/m²||77.90 %||3,930 EUR/m²||61.30 %|
|10 Years||1,550 EUR/m²||204.30 %||2,820 EUR/m²||124.80 %|
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 33,770 existing apartments have been advertised. The median is currently about 4,710 EUR/m². The price correction compared to the same period last year is thus approx. 12.20 %. In the new building segment the median for all locations and apartment types is currently about 6,120 EUR/m². There were approximately 6,080 properties on offer in the period of one year. New building projects are on average priced at 4.20 % higher than a year ago.
Evolution of price segments
For our analysis, we split the supply market into four price segments. It can be seen that a reduction in the number of offers and a shift from the lower price segment to the middle and higher segments has been taking place in parallel with the price increase since years. There is no sign of the trend slowing down, but an increasing price differentiation by location is becoming visible. The trend in the segments varies across the districts. Local analyses can be found in our district reports.
Berlin Properties: Short-term development of quoted prices
In the course of 12 months, seasonal fluctuations and possible effects of regulatory measures become visible. The effects are only slightly pronounced when considered over the entire urban area.
The rise in rents in Berlin has slowed down. In our analyses we examine the rental offers of the most popular portals and daily newspapers in Berlin. Communal housing associations are starting to broker rental offers via internal channels. It can be assumed that the median value determined by us would be lower if the municipal offer 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. In privately financed residential construction, about 50 percent of the production costs come from the main building costs and ancillary costs. Across all construction sections, construction work has increased considerably within 10 years. Approximately 30 per cent are at the expense of the building ground, for which the prices have increased up to five times within five years. In addition to property and construction costs, developers also have to factor in capital costs and financial risks. In total, even subsidised rents in the often cited target corridor of 6.50 EUR/m² to 10.00 EUR/m² cannot be realised under the aforementioned conditions in new buildings.
Accordingly, rents have developed in the new construction segment. New contract rents are currently advertised at a median rent of 17.40 EUR/m², which corresponds to a price adjustment of about 15.50 % compared to the same period last year, based on 6,090 offers in 12 months. Within the last 5 years the cold rents in new buildings thus developed by about 46.30 %.
Rents in existing housing
Rents for existing housing are also rising against the background of scarcity. In addition, part of Berlin's housing stock shows more or less strong signs of degradation. After many years of letting, in which only maintenance measures were possible, extensive modernisation is often necessary before new lettings can be made. The associated investments must be balanced by higher rents. Plans for more far-reaching regulatory measures, which force landlords to anticipate rent adjustments, are also having the effect of boosting rents. A recent example are initiatives for a rental moratorium.
According to our analyses, in the last 12 months about 76,530 rental apartments (existing units) were offered for re-rental. The new contract rents advertised during this period averaged around a median of 11.25 EUR/m². This corresponds to a price adjustment of about 2.00 % compared to the same period of the previous year. Within the last 5 years the new contract rents in Berlin developed by about 34.30 %.
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||11.60 EUR/m²||-||17.40 EUR/m²||-|
|1 Year||11.25 EUR/m²||3.20 %||15.05 EUR/m²||15.50 %|
|3 Years||9.95 EUR/m²||16.60 %||13.05 EUR/m²||33.10 %|
|5 Years||8.65 EUR/m²||34.30 %||11.90 EUR/m²||46.30 %|
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 76,530 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.
Conservation areas in accordance with §172 BauGB (Building Code), usually abbreviated to the term " milieu protection ", have developed from originally urban to political instruments. As more and more milieu protection areas are being introduced in Berlin, we will not list them here. For owners and sellers, milieu protection has become a central issue alongside the rent cover. The maintenance statutes intervene in almost every phase of a real estate engagement. Many owners are being surprised by the protection of the environment, as its establishment is not transparent. What the Senate and districts regard as the strongest instrument against speculation in housing on the Berlin real estate market poses considerable problems for owners of apartment buildings in areas subject to regulations. Please visit our milieu protection service page, where you will find an overview of our services. In our milieu protection map below you can check whether your property is located in a conservation area according to § 172 BauGB, or in an investigation or observation area. We constantly check the minutes of the district assemblies for relevant developments.
The basic conditions for real estate investments in Berlin are good, although they are always balanced between supply shortages and market regulation. In inner-city locations in particular, the city and districts are relying on regulatory market intervention to dampen purchase prices and rents. In addition to the introduction of further milieu protection areas, the so-called rent cap was adopted in June 2019, which is intended to freeze rents in Berlin for a period of 5 years. Our team will be happy to advise you on all aspects of milieu protection and the handling of real estate in milieu protection.
Despite increasingly difficult political circumstances, the Berlin real estate market remains a sought-after investment location. The price increases in Berlin are primarily based on catch-up effects and scarcity. As long as supply cannot keep pace with demand, government market intervention will be able to dampen, but not stop, the development of rents and purchase prices. According to the 2019 rent index, the annual rent increase in Berlin is currently 2.5 percent per year. This shows that the rent brake introduced in 2015 is taking effect. With the introduction of the rent cap, rents in Berlin have been frozen as from June 2019. Without the construction of a sufficient number of new dwellings, however, state policy will not succeed in significantly easing the pressure on the housing market.
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 24.01.2020 .
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.