Apartment Building Report Berlin, Q3 2025

Apartment Building Report Q3 2025

Dear Readers,

Tensions in Berlin’s multifamily and mixed-use property market are easing. A range of developments contribute to this shift. Most notably, the downward movement in purchase prices and multipliers appears to have come to a halt. Although transaction data for the first half of the year remains incomplete, initial trends are emerging.

Buyer behaviour is changing. Many investors no longer anticipate further price declines. After a period of observation, reassessment, and profile alignment, they are repositioning.

Value-add strategies are seeing a resurgence. Residential and mixed-use assets with accessible optimisation potential are back in demand, particularly among private investors, mid-sized institutions, and single family offices. Core properties with stable cash flows are currently more relevant to large institutional investors. In a persistent high-interest environment and under continued conservative lending criteria, this segment shows selective, quality-driven demand. Less capitalised private buyers are looking for entry opportunities in peripheral locations. Overall, investors are increasingly interested in engaging with their assets rather than passively holding them.

What does this mean for owners? Neglected properties are regaining relevance—especially when actionable improvements allow a more hands-on approach by the buyer. Owners should assess which measures are likely to be rewarded in a sale. For well-managed, developed assets, pricing and target group alignment are key.

In the first six months of 2025, the average transaction volume for rental buildings in Berlin stood at approximately EUR 4.2 million. Higher average prices were achieved in Charlottenburg, Prenzlauer Berg, Mitte, and Neukölln—each for different reasons, outlined in the following sections.

Overall, the market sentiment resembles the phase before a race starts: focused, poised. If your aim is to achieve the best outcome, our updated report for Q2 and the beginning of Q3 2025 offers a solid framework. As we have done for over 20 years, we remain at your disposal for a confidential, non-binding consultation.

Yours sincerely,
Peter Guthmann

Who is buying what?

According to data from Berlin’s Expert Committee, 192 multifamily and mixed-use properties changed hands by the end of May, totalling approximately EUR 823 million. Of these, 158 transactions were recorded in Q1. A further 39 sales were reported by May for the second quarter. With a transaction volume of EUR 584 million, Q1 was in line with the same period in 2024.

While no two properties are alike, we identify the right buyer profile for each asset. Which investor group is relevant for your property depends on multiple factors. A thorough analysis—developed together with you—provides clear recommendations for structuring the sale and transaction process. The objective: to unlock the full potential of your investment.

Between Intrinsic Value and Market Price

Purchase prices are showing a slight upward trend, but transaction activity in Berlin’s multifamily and mixed-use property market remains subdued. Sales volumes have been declining since 2018, and figures from Q1 and Q2 2025 do not yet suggest a structural turnaround. With 198 recorded transactions by the end of May, the annual projection currently falls below 500 deals.

On the seller side, recent price movements have led to a wait-and-see approach. Long-term owners, particularly those with generational holdings and conservative asset strategies, are reviewing market conditions carefully. The value-add strategies visible in the market often do not align with the price expectations of these owners. The resulting gap between intrinsic value and market price continues to weigh on overall momentum.

Buyers, despite average entry yields of around 4.4 percent—driven by rising rents and lower multipliers—remain cautious. Given the price levels observed between 2018 and 2022, often exceeding 30 times annual rent, followed by the subsequent correction phase, this cautious stance is understandable. Moreover, banks’ current lending practices further constrain pricing.

This divergence in expectations, which began in the difficult transition from 2022 to 2023, has already begun to stabilise. As 2025 progresses, further convergence between buyer and seller positions appears likely.

Transaction Volume Follows Market Trend

In previous years, overall transaction volumes declined while total sales revenues remained stable or even increased—driven by rising price per square metre or isolated large-scale deals. That seller-driven cycle has now paused. At present, fewer transactions directly translate into lower total volume.

In 2024, large portfolio sales in Neukölln and Charlottenburg led to a temporary spike in turnover. Comparable effects have not materialised in 2025 so far. Accordingly, the revenue outlook for the current year remains subdued. With 197 transactions recorded to date, the total volume amounts to approximately EUR 823 million. Annualised, this points to a turnover below EUR 2.5 billion.

Market Prices, Development Potential, and Strategic Options

Buyers are currently seeking low market entry prices and multipliers that can be improved through targeted measures. The focus lies on value-add strategies—less on short-term speculation, more on planned development.

However, this is not a new gold rush. Berlin remains a demanding and high-priced market, even after recent corrections. Unlike secondary or peripheral cities, structurally higher multipliers continue to be paid in the capital. Key drivers include sustained in-migration, a stable labour market, and Berlin’s ongoing appeal as a hub for start-ups, creative industries, research, culture, and nightlife. The capital city premium continues to apply—even in a cautious market environment.

Value is created through a combination of intrinsic asset quality, rental potential, location, and development prospects. Strategic positioning in this environment requires market insight and accurate analysis. With our experience, data-driven evaluations, and transaction expertise, we support well-informed decisions on both the buyer and seller side.

The following overview illustrates the development of purchase price multipliers in Berlin’s inner districts. In 2018, multipliers ranged from 19 to 42 times (Mitte). Currently, they range between 18 and 28 times. Early signs of a trend shift are emerging, though data coverage for 2025 remains limited.

Conclusion

Berlin’s investment property market is emerging from a consolidation phase lasting more than two years.

• Following a price correction of approximately 30 percent since 2022, purchase prices have stabilised.

• As of June 2025, the average price per square metre stands at approximately EUR 2,260.

• The average multiplier is currently 24.2 (based on limited data).

• With a transaction volume of EUR 823 million, market activity remains low—though Q3 and Q4 are typically stronger.

• The disconnect between buyer and seller expectations persists.

• Most investors no longer anticipate further price declines and are repositioning.

• Sellers are acting more strategically, aiming for stronger results in a stabilised market environment.

• Investment strategies are focused on value-add opportunities.

• Demand remains healthy for small to mid-sized assets—driven by attractive entry prices and higher initial yields.

• Investors are diversifying capital rather than concentrating it in a few large acquisitions.

• Average entry yields have risen to approximately 4.4 percent.