Publications

No end in sight to price uptrend in Berlin residential
Research - FEBRUARY 16, 2018

No end in sight to price uptrend in Berlin residential

by Marek Handzel

Rent and price increases held steady throughout 2017 in the Berlin housing market, further cementing the city as a popular target for investors in residential property.

The latest Berlin housing market report published jointly once a year by high-volume real estate financer Berlin Hyp and CBRE has revealed that asking rents rose by an average 8.8 percent compared with 5.6 percent in 2016. Consequently, rents advertised in Berlin have currently settled at €9.79 per square meter ($12.18 per square foot) on average, with a great deal of variation in individual city districts.

The report, which evaluates more than 85,000 rental housing offers for a total of 190 postcode districts of Berlin, also showed that purchase prices for condominiums climbed by 12.6 percent to an average of €3,706 per square meter ($4,610 per square foot).

Dr. Henrik Baumunk, head of residential services at CBRE Germany, says that there is no end in sight to the increasing price trend.

“The most important factor driving rents and prices is Berlin’s dynamic development,” explains Baumunk. “The population, economic performance and jobs have been on the rise for years — and there is no end in sight.

“Consequently, there is also no foreseeable end to the uptrend in rents and purchase prices in Berlin.”

CBRE and Berlin Hyp have also pointed to official government population predictions that have assumed an increase of 7.5 percent in the number of residents in Berlin over the period from 2015 through 2030. This population rise, they say, will continue to boost the residential real estate market.

According to CBRE research, investments upward of 50 residential units were made in an amount of around €3.4 billion ($4.23 billion) in 2017, falling short of the previous year’s level of €3.6 billion ($4.5 billion). The largest transactions in the first three quarters of 2017 involved Deutsche Wohnen AG, the ADO Group and the public housing association of the city-state of Berlin.

“Even though the record volume of 2016 was just missed, there is no end in sight to the investment boom in the capital city,” says Michael Schlatterer, team leader of market intelligence at CBRE in Germany.

“All in all, around one-quarter of the investment volume in Germany was channeled into portfolios upward of 50 units in Berlin. In terms of size, price trend and liquidity, Berlin’s housing investment market is unique in Germany, which makes it very attractive for many investors,” he adds. 

Forgot your username or password?