Berlin Real Estate Report 2018

Low interest rates, sustained population growth and uninterrupted strong demand are driving up prices on the Berlin property market. Berlin as an investment location remains attractive. Around 30,000 apartments were offered on the Berlin apartment market from January to October 2018. According to our analyses, the average price per square metre in demand on the reporting date of 15 October 2018 was around EUR 4,400.

The price increase compared to the same period of the previous year thus amounts to approx. 14 percent. If you bought your apartment in 2008 for around EUR 1,900/m² on the Berlin real estate market, you can currently offer it for around 2.3 times that amount.

Our market report differs significantly from other analyses. We update our figures monthly and have our finger right on the pulse of the Berlin property market. We analyze the development on the basis of millions of data sets and with the experience from many years of successful work.

Contact us, if you want to get one of the best partners in Berlin at your side for your investment or sales considerations.

On the way to Cosmopolis

Berlin is one of the most dynamic and attractive cities in Europe. The German capital is a central hub for science and research, tech start-ups and the international creative scene. Especially among the millenials, Berlin ranks among the most sought-after capitals in the world. For the "Digital Natives", Berlin is number 1, ahead of London, New York or Amsterdam. Of the current 3,725 million Berliners, over 725,000 are of foreign origin.

Economy catching up

At the same time, economic output in Berlin is growing dynamically. In 2017, the gross domestic product rose by an average of 3.1 %. Berlin currently occupies second place among the German federal states. Overall, Berlin's economy is in the midst of a rapid catching-up process. The unemployment rate is at a record low. In September 2018 it stood at a historically low 7.9 per cent.

Berlin real estate remains a scarce resource

Even if there are different views on quantifying the acute housing shortage, it is assumed that the Berlin real estate market is acutely lacking at least 130,000 apartments. In addition, Berlin is growing year after year by the size of a small town. The middle variant of the population forecast of the Berlin Senate (2018) assumes a growth of 180,000 people by 2030. 180,000 people with 1.77 persons per household generate a demand of another 100,000 apartments. 130,000 acute backlog plus 100,000 apartments for the growing city, results in a total demand of at least 230,000 apartments by 2030. The city would therefore need 21,000 apartments. Year after year, until 2030.

Construction does not keep pace, land prices and construction costs rise

Despite rising construction activity, the completions of projects are not sufficient to even come close to covering demand. From 2013 to 2017, 55,435 apartments were reported to have been completed, a 5-year average of around 11,100 per year. The majority of new apartments do not come from municipal housing companies, but from private builders.

Land and construction costs

In Berlin, construction costs for residential buildings have risen by 19 percent since 2010. The annual increase of 3.7 percent from 2016 to 2017 reached a 10-year high. At the same time, prices for building land in Berlin are rising. From EUR 236/m² in 2010, prices have risen to EUR 695/m² in 2017. If building prices and building land prices are added together, the increase in 7 years in absolute figures according to our research is at least EUR 1,500/m².

No sign of stagnation

For readers in a hurry, we have compared the prices for Berlin properties from 2007 with the real estate prices of 2018. In all 24 districts of Berlin, the prices per square metre have at least doubled in the 11-year period (Tegel), multiplying by a maximum factor of 4.2 (Neukölln). The peak in the average offer prices in the segment for existing apartments is, as it was 11 years ago, the district of Mitte, with a rounded offer price of approximately EUR 6,400/sqm. In terms of the relative price development, Neukölln is at the top, where average house prices have risen 4.2 times in eleven years. Kreuzberg is approaching the 5,000 euros per square meter of living space for the first time (existing apartments built until 2013). Moabit is also following behind. We collected the lowest offering prices, as of Q3 2018, in Hellersdorf, Spandau, Reinickendorf and Tegel.

District ranking 2018

District 2007 (rounded) 2018 (rounded) Factor 2007 to 2018
Neukölln 1000 4200 4,20
Moabit 1000 4000 4,00
Wedding 1000 3900 3,90
Marzahn 1100 3500 3,18
Kreuzberg 1600 5000 3,13
Tempelhof 1200 3600 3,00
Tiergarten 1700 5100 3,00
Schöneberg 1500 4400 2,93
Weißensee 1600 4500 2,81
Wilmersdorf 1900 5300 2,79
Mitte 2300 6400 2,78
Friedrichshain 1800 4900 2,72
Charlottenburg 1800 4800 2,67
Spandau 1000 2600 2,60
Reinickendorf 1100 2800 2,55
Zehlendorf 1700 4200 2,47
Lichtenberg 1500 3700 2,47
Steglitz 1500 3700 2,47
Prenzlauer Berg 2100 5100 2,43
Köpenick 1500 3600 2,40
Hellersdorf 900 2100 2,33
Pankow 1600 3700 2,31
Treptow 1400 3200 2,29
Tegel 1400 2900 2,07

New arrivals to Berlin by origin (2017)

District Old federal states New federal states Outskirts Abroad
Charlottenburg 28.50% 8.00% 5.10% 63.50%
Friedrichshain 32.90% 9.80% 3.80% 57.30%
Hellersdorf 23.60% 23.50% 24.20% 52.90%
Köpenick 29.00% 19.60% 15.90% 51.50%
Kreuzberg 26.10% 5.30% 2.20% 68.60%
Lichtenberg 23.60% 16.70% 8.40% 59.70%
Marzahn 21.20% 19.80% 13.20% 59.10%
Mitte 28.20% 6.10% 2.80% 65.70%
Moabit 31.90% 8.60% 3.70% 59.50%
Neukölln 27.60% 8.60% 5.10% 63.80%
Pankow 31.80% 18.30% 14.50% 49.90%
Prenzlauer Berg 34.30% 9.00% 3.60% 56.70%
Reinickendorf 24.00% 10.80% 9.80% 65.20%
Schöneberg 29.30% 7.30% 4.60% 63.30%
Spandau 22.60% 10.80% 11.70% 66.50%
Steglitz 30.50% 11.30% 9.00% 58.20%
Tegel 27.20% 13.60% 12.60% 59.10%
Tempelhof 17.60% 6.90% 5.70% 75.50%
Tiergarten 24.30% 5.60% 2.20% 70.20%
Treptow 28.50% 18.20% 13.30% 53.30%
Wedding 28.70% 8.80% 3.90% 62.40%
Weißensee 25.60% 13.80% 9.30% 60.50%
Wilmersdorf 26.70% 7.30% 4.80% 65.90%
Zehlendorf 28.40% 8.30% 11.00% 63.30%

Berlin Real Estate Price Segments 2018

Viewed over the whole of Berlin, according to our analyses, the square metre price for apartments demanded by sellers on the market is approximately EUR 4,100/m² as of March 2018. The prices for existing apartments are more differentiated according to location, age, size and quality as well as typology than in new buildings.

There is a shift in the price range from the lower to the middle and upper price ranges across the entire urban area.

  • The price segment up to EUR 2,000/m² will continue to lose weight in 2017 with less than 5,000 offers. In some districts there were almost no more apartments offered in this segment.
  • The price segment of EUR 2,000/sqm to 4,000/sqm was nearly stable compared to the previous year. It is the strongest market segment with almost 56 percent of all existing apartments on offer.
  • The price range from EUR 4,000/sqm to EUR 6,000/sqm covers approx. 26 percent of the total housing supply in Berlin.
  • The price segment from EUR 6,000/sqm was already 7.1 percent in 2017.

Average offering price of an apartment in Berlin: 4.400 EUR/sqm

According to our research the average price per square meter is at 4.400 € in 2018. This analysis includes the whole area of Berlin and all existing buildings. More significant than for new built apartments, the location, age, size, quality and type are important influential factors for existing apartments.

It should be noted that almost one half of all new built apartments and houses are meant for ownership not for rental purposes. Many projects have already been permitted and will be offered to the market in the coming years. The pressure on the housing market could decrease with increasing new building projects.

Price Segments in Berlin’s districts

Berlin’s districts are developing in a heterogeneous degree. The lower price segment almost completely disappeared in the districts Mitte, Kreuzberg, Charlottenburg, Wilmersdorf, Friedrichshain and Prenzlauer Berg. At the same time the upper price segment continues to grow. Our district reports show a detailed price evolution of Berlin’s districts from 2007 until today.

Prices by apartment type

4,400 Euro/m² is the average required price for inventory residential units in Berlin excluding new buildings. Depending on the apartment type, prices may differ to a greater or lesser extent from the average.

In the district report section we have analysed the purchase prices for you in detail, depending on the type of apartment and the size of the apartment.

Continued influx will drive market for decades

The dynamic development on the Berlin housing market and the rising demand, which is expected to remain strong, make Berlin a top location for investments.

The place to be

No other place in Germany will need, plan and build as many apartments in the coming years as Berlin. Every year, people from about 250 countries come to the capital. Berlin is one of the world's most sought-after metropolises.

Real estate in Berlin at a glance

2.084.336
Households in Berlin (2015)
320.302
Residential buildings in berlin (2015)
541
Apartments per 1 000 inhabitants
39,5
sqm
Living space per capita
73,1
sqm
Living space per apartment
1,77 Persons
Ø Household Size

Many upcoming investment opportunities

It is true that the Berlin real estate and housing market is a tenant market. But this is exactly where the opportunities for investors lie. In total, there are over 1.9 million apartments in Berlin, including around 1.6 million rental apartments. Approximately 18 percent of this is owned by the Berlin housing associations, a further 12 percent by cooperatives. About 70 percent are owned by large institutional owners and private individuals. A few examples show why the real estate market in Berlin is extraordinarily interesting despite, or precisely because of, the tenant market.

  • Young, high-income households are immigrating to the city. Households with medium to high incomes are growing. New segments of buyers are developing, which is quite normal for the acquisition of property.
  • Even though the number of completed buildings is rising, an excess demand is still expected. Long-term investment opportunities are also given with the building of rental apartments.
  • In an international comparison Berlin shows moderate prices. Prices per square meter are very attractive for international buyers. The focus is not mainly put on the return but on the potential increase in the value of a property. Choosing to invest in Berlin real estate is safe.

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