Microanalysis real estate market Berlin
Micro market report Kreuzberg
Not more than 20 years ago Berlin-Kreuzberg was known to be the neighborhood for the working class. Standards were extremely low: rotten buildings, apartments without toilets or a bathroom at all, no access to warm water and heating by stove only.
Whole blocks of flats were torn down in the 70s and replaced by functional buildings. Luckily any further destruction could be stopped by the protesting community. An example is the former hospital “Bethanien” at Marienplatz, which could only be saved from demolition thanks to the commitment of the community. Today “Bethanien” is an international house for arts. The history of Kreuzberg shaped the awareness of its residents for culture in a modern and international context.
Kreuzberg stands for the progressive and modern character of Berlin. Especially young people from almost 200 different nations live here. The internationality makes the neighborhoods lively and easygoing at the same time. Culture and an incredibly nice street - and night life are present 365 days a year. Kreuzberg is characterized by a long waterside at the Landwehrkanal (canal), parks like Görlitzer Park and Treptower Park, clubs and restaurants by the water and the multicultural, urban lifestyle.
With the fall of the Berlin Wall in 1989 the district was thrown back into his former central position in the city. Many residents went away in the following years, mainly relocating in merging districts like Prenzlauer Berg, Friedrichshain and Neukölln. Migration was holding on for years and only stopped with the new century and the immigration today.
Even today people still differentiate between “Kreuzberg 36” and “Kreuzberg 61”, which are the old numbers of the postal districts. An emblem for Kreuzberg 36 is the central Oranienstraße with various shopping opportunities, cafés, bars and clubs. The street is internationally known to be the rougher part of the district. Bergmannstraße is the emblem of Kreuzberg 61 and is also full of individual stores, cafés and restaurants but is considered as the more dapper part of Kreuzberg. The district got its name from the 66 meter high hill “Kreuzberg” at the Viktoriapark.
Real estate market in Kreuzberg
Kreuzberg went through a structural shift: the reputation improved with the influx of international employers and founders, artists and young professionals settling here. Even though Kreuzberg is very popular, the number of owners living in their apartments (and not renting them out) is only increasing slowly. Kreuzberg continues to be a district of renters and it is not surprising that the vacancy rate is very low.
Real estate evolution Kreuzberg
Chart above: Shift of price segments between 2007- 2017. The curve shows the development of the average asking price for all apartment types.
Real estate prices in Kreuzberg
The demand for real estate in Kreuzberg can currently not be satisfied even though many apartments in dozens of residential projects could be delivered to their new owners in the last 4 years. The demand is continuously high and squaremeter prices in Kreuzberg have accordingly risen about 10 percent in 2016. A slight slowdown could be observed in the upscale segment. The time needed to sell an apartment went up with the increase of prices: it takes about 15 weeks to sell an apartment in Kreuzberg, whereas it took only 13 weeks the year before.
Approximately 1.300 flats and 70 roof top and penthouse apartments have been brought to the market in 2016. The highest asking price was above 10.000 EUR/sqm in 2016. It is interesting to see that while prices tripled from 2007 until 2016 on the other hand the average size of apartments got smaller. Today an average apartment in Kreuzberg measures approximately 92 sqm with 3 rooms. The gap between existing buildings and newly built apartments is around 900 EUR/sqm.
What the population and living in Kreuzberg is like…
The structure of Kreuzberg’s population is dynamic and ever changing. Half of the 151.500 (2015) people living here have a migration background. Students, who moved here years ago because of low rental prices, are becoming young professionals and starting their family. They cover the middle class of Kreuzberg and are part of the reason why the buying power in Kreuzberg is rising. Young residents and international visitors value the variety of pubs, bars, clubs and the diverse music scene.
Kreuzberg is diverse and multi-cultural with its galleries, bookstores, clubs, cafés, showrooms and artist scene. Also the alternative health scene settled here. Besides the alternative part of Kreuzberg exclusive restaurants and boutiques can be found, which goes back to the rising buying power. Not long ago the restaurant “Horvath” at Paul-Linke-Ufer got its second star from “Guide Michelin” (a guide for restaurants, hotels and travel).
Thousands of visitors come to Kreuzberg every year for events like the carnival of cultures and the street festival on the 1st of May. Many tourists prefer staying in Kreuzberg during their stay in Berlin to experience the culture and events here. The number of holiday flats got higher and higher throughout the years, which is why the prohibition of misuse has been introduced.