New rules, new opportunities: Your guide to the Berlin apartment block market in 2025

Berlin apartment block market 2018-2025: Cycle, Correction and Prospects

Dear Readers,

The Berlin apartment building market has gone through three significant phases since 2018: a dynamic upswing with a turnover peak of €5.84 billion in 2021, a significant correction in 2022 and 2023 and a phase of realignment since 2024. Market activity stabilised last year: Despite fewer transactions, turnover rose again from less than three billion euros in 2023 to 4.15 billion euros. This development was driven by large-volume portfolio transactions - including in Neukölln. There were no comparable portfolio deals in the first two quarters of 2025.

Rising interest rates have replaced the high price levels of the zero-interest phase. Current valuations are more closely aligned with yield expectations. Investors who bought at high prices are acting more cautiously and adjusting their strategies. Sales today require a clear justification of development potential. Increases in value are no longer generated automatically by rising prices. Buyers with a value-add approach are concentrating on favourable entry points and quick optimisation opportunities.

Our analyses are based on the official transaction data of the Berlin Expert Committee. They contain aggregated information on purchase cases, prices and factors. The aim is to provide you with a reliable basis for strategic decisions. We are happy to support you with property-specific valuations in line with your objectives.

Yours, Peter Guthmann

Managing Director

From boom to consolidation

Boom phase (until the end of 2021)

Up to and including 2021, the market for residential and commercial properties in Berlin is characterised by record values:

• High monetary turnover: peak in 2021 with 914 transactions.
• Very high monetary turnover: Record value of €5.84bn in 2021.
• Maximum purchase price factors: At 32.1 x the annual rent, the highest value to date.

Correction (2022-2023)

Interest rate turnaround and general economic uncertainty end upward trend:

• Slump in transactions to 751 (2022) and 600 (2023).
• Turnover halved: to 2.98 billion euros (2023).
• Multipliers: Correction to 25.3 in 2023.

Volatility and diversification (since 2024)

Increasing market spread. Revaluation of locations:

• Transactions catching up slightly (10% to 2023).
• Cash turnover recovered to € 4.15 bn

WANTED: Property with moderate entry price and development potential.

Around 50 per cent of apartment buildings in Berlin are currently signed for between €2.15 and €5.15 million. The median is a comparatively low €3.2 million, with the lower end at €0.5 million and the highest value achieved in an asset deal at around €12 million. There were no portfolio transactions in the first half of the year, with the market focussing on individual sales and smaller packages. Compared to previous years, the average lot size across the city has therefore fallen to less than €4 million.

Charlottenburg accounted for the highest monetary turnover with €165 million and 19 transactions in Q1 and Q2. The median purchase price in Charlottenburg is €8.7m - demonstrating the quality of the City-West location. In Neukölln, €124 million was realised in 28 transactions. Neukölln thus remains one of investors' favourites.

Pankow achieved 106 million euros in 17 transactions. Wilmersdorf follows with 87 million euros from 19 transactions. In Zehlendorf, 85 million euros have been realised to date with only 10 sales; the median value of 8.5 million euros reflects the high-quality locations.

What can be concluded from this?

The era of across-the-board, city-wide price increases is over and investors are currently looking for properties with a fair price and demonstrable potential. Future yields will be largely determined by hyperlocal factors, the quality of the property, the occupiable and secure rental potential (rental yields), energy efficiency and the strategic alignment with the major urban development lines.

Core investments in established locations: Investors focussing on security and capital preservation concentrate on districts such as Charlottenburg and Zehlendorf. High quality and stability are bought here, which explains the high median prices.

Value-add and growth investments tend to be decentralised: Investors with higher yield expectations focus on "cheaper" districts with absolute prices ranging from 500K to around 3 million euros.

Investors are buying smaller houses

In 2021, the average transaction value was €6.54 million per property - the highest level to date. With the rise in interest rates, the value fell by around 25% to €4.78 million in 2022. In 2023, it rose slightly to €5.03 million despite declining sales and purchases. In 2024, the average reached €6.29 million. In the first half of 2025, the focus will be on more affordable value-add properties with an average lot size of €3.84 million while the number of transactions remains stable.

Investment clusters

The data we analysed shows a clustering into three main categories of investment profiles and markets.

High-priced, secure and established markets: These districts are characterised by the highest money turnover in combination with high median purchase prices. The number of sales is moderate, which is due to large, expensive individual transactions. These are the classic core markets in which investors justify higher prices for stability, location security and prestige.

• Charlottenburg: Leader in terms of money turnover with 165 million euros. The median property purchase price of 8.7 million euros is also high. Here, people invest in expensive, secure investments.
• Mitte: Leads the price scale with a median purchase price of 11.8 million euros. Although only 7 sales took place in the first half of 2025, turnover totalled around 83 million euros. This is the Berlin market for international, exclusive premium and luxury properties.
• Zehlendorf: High-priced location with villa character. A turnover of 85 million euros was achieved with only 10 sales, which explains the high median price of 8.5 million euros.
• Wilmersdorf & Prenzlauer Berg follow this pattern with median prices bordering on the middle cluster with solid sales.

Dynamic transformation and growth markets: These Berlin districts show a high number of transactions. The median prices are moderate, but the total turnover is high. Investors focusing on value appreciation and development potential are active here (value-add strategies).

• Neukölln has the second-highest monetary turnover at €124m and the highest transaction activity in the first half of the year with 28 purchases. The median price of €4.4 million shows that the middle price segment dominates. Neukölln is one of the favourites for investors who want to participate in the district's appreciation.
• Pankow is a district that has already reached a very high price level with a turnover of 106 million euros and 17 purchases at a high median price of 6.2 million euros, but is still considered a growth market.

Lower-priced markets and up-and-coming markets: These districts have very favourable purchase prices in common.

• Lichtenberg and Wedding also districts of Spandau, Köpenick and Tempelhof

Investor profiles

The property typology of Berlin apartment blocks is as diverse as the locations. The buyer profiles are correspondingly diverse.

Stability in prime locations, investment pressure in peripheral markets

During the boom, a homogenisation of house prices could be observed across all locations. Rising values for square metre prices and factors, as well as a shortage of supply in prime locations, brought new locations into focus. Basic residential locations in the vicinity of central hubs were particularly in demand - such as neighbourhoods in Wedding with links to Mitte, Lichtenberg under the influence of Friedrichshain or Moabit near Tiergarten and Mitte. Smaller locations in Pankow were also included. These markets are currently coming under greater pressure than medium and good residential locations. Prime locations such as Mitte, Charlottenburg and Wilmersdorf, on the other hand, are proving to be stable and high-priced. Although prices have also fallen here, they have fallen less sharply - both in terms of purchase prices and factors.

Multipliers

Conclusion

The Berlin apartment building market has already bottomed out after the price correction and is in a phase of stabilisation and reorientation. The market environment is no longer characterised solely by the turnaround in interest rates, but also by the interplay of structurally higher financing costs, regulation and ongoing geopolitical uncertainties.

The era of purely passive increases in value appears to be over. In its place is a more mature, demanding market that rewards active management, constant asset evaluation and strategic initiatives. These challenges are real, but the fundamental drivers of the Berlin market - a severe housing shortage, population growth and global appeal - remain intact.

For discerning, active investors who understand the new rules of the game, the current market offers compelling long-term opportunities based on tangible value creation rather than speculative hope. Investors are currently looking for fair entry prices and factors that can be further optimised through targeted measures. Value-add strategies are therefore replacing short-term horizons.

Transactions and prices by location: the spread is increasing.

Overall, the apartment block market is less monolithic than before. There is an increasing spread between locations. Investors are paying particular attention to how flat prices and rents are developing, especially in B-locations. A professional and data-supported valuation, which not only looks at offers but also at the transaction market, is essential.   

Property condition is closely scrutinised

Building interest rates have stabilised at a plateau of around 3.5% and it is unclear whether the ECB will lower interest rates further. Every euro that has to be financed - be it for the purchase price or for subsequent renovations - is therefore significantly more expensive than it was just a few years ago. This forces buyers to precisely calculate the total costs over the entire holding period. The market is no longer dominated by speculative capital hoping for quick increases in value. The most important players at present are experienced family offices and private investors who make their decisions on the basis of hard facts and fundamental key figures. They carry out in-depth due diligence because their strategy is based on real optimisation potential and not on market hopes.

Why is capex so crucial today? In a market with high interest rates and no automatic increase in value, the return on an investment is directly dependent on the ratio between purchase price, rental income and the necessary capex. A buyer today calculates something like this: Total investment = purchase price + transaction costs + foreseeable capex. The expected return depends directly on the accuracy of this calculation.

Regulation is more than a rent cap

Unrenovated, energy-inefficient buildings, so-called "brown assets", harbour an operating cost risk. Due to rising CO₂ costs and the increasingly strict ESG criteria of banks when granting loans, the condition of a property on offer becomes a direct financial factor. Buyers assess this risk precisely and price it in.

Outlook

The challenges are real, but the fundamental drivers of the Berlin market - a severe housing shortage, strong population growth and its global appeal - remain intact. For discerning, active investors who understand the new rules of the game, the current market offers compelling long-term opportunities based on tangible value creation rather than speculative hope.

For you as a seller

In today's market, you are not just selling a property, you are selling a business case. A professional buyer scrutinises more closely because the financing is more expensive and the return comes from active value creation rather than passive market development. Transparent, complete documentation of the condition of the property is your most powerful tool for reducing uncertainty among buyers and creating a solid basis for fair and realistic price negotiations. This applies all the more in B-locations, where the entire investment logic is based on a precise calculation of future refurbishment costs.

Timeline for the Sale of Your Investment Property

The entire transaction process for selling a multi-family house (MFH) in Berlin can be made streamlined, secure, and efficient through professional preparation and execution.

• Initial Consultation: Clarification of the property’s status and determining market-appropriate pricing
• Documentation Preparation: Creating comprehensive documents to facilitate the review process for buyers and banks
• Marketing: Discreet off-market placement within a solvent internal client network
• Contract Handling: Legal review of the contract with lawyers and notaries, including notarization
• District Review Period: (Applicable to social preservation areas; see our blog post on pre-emption rights)
• Execution of the Purchase Agreement: Signing and payment due date
• After Sales: Handover of the property and follow-up support

For sales in designated "milieu protection" areas, districts have a three-month review period, despite the pre-emption practice being halted by court decisions. If a property is managed in accordance with the rules of the preservation ordinance, no pre-emption right applies.

About GUTHMANN®

Since 2006, as a family-run company, we have focused on personal service and tailored solutions. Our profound market knowledge and data-driven analyses, combined with excellent and reliable buyers, enable us to precisely evaluate your property and market it with great success. With our long-standing experience, we ensure an efficient and transparent sales process—achieving outstanding results. Since 2006, we have successfully brokered approximately 100 residential and commercial buildings. We are recognized as one of the relevant Berlin brokers for apartment buildings. We provide discreet and to-the-point advice.