Berlins housing prices are steadily increasing
Rents as well as purchasing prices increased heavily on the Berlin housing market in 2017. That’s the conclusion of the Housing report Berlin 2018 developed by CBRE and the Berlin Hyp.1 Therefore median asking rents in 2017 increased by 8.8 percent to 9.79 Euro per square meter and asking prices for condos by even 12.7 percent to 3.706 per square meter. So the price dynamic of the German capital grew strongly. Last year, asking rents only increased by 5.6 percent and prices for condos only by 9.6 percent.2
Market figures contradict with the numerous forecasts that already spoke an impending price decline for Berlins housing market. The current ZIA-spring report3 already warns about declining housing prices in the German capital. CBRE on the other hand predicts that ‘there is no end of rising rent and purchase prices in Berlin’. One year ago CBRE was forecasting a slower price development – but this prognosis got now revoked.4 The main reason for this trend is the dynamic development of Berlin regarding its population, economic strength and offered jobs that will last in the future.
“Berlins residential invesment market is unique”
A further issue is that housing construction cannot hold up with the fast speed of influx. Berlin grew by around 30.000 households in 2016 while there were only 13.659 flats to be finished.5 Even though construction numbers are on the rise the ready to move in apartments cannot hold up with the influx in 2017. Berlin is moreover with Cologne tail light of the 7 German metropolises regarding the ratio in apartment building construction per 1.000 residents.
This leads to less flats coming on the market. According to the housing market report the number of offered rent apartments decreased in 2017 as loads of tenants dread of moving due to the high rising asking rent. Even advertised condos decreased significantly by 12.5 percent. CBRE states that owners have low incentives of selling due to rising prices and missing investment alternatives.
An even heavier increase in price as seen at condos could be shown at apartment buildings in Berlin. The average price per square meter has, compared to the previous year period, increased by 16.4 percent to 2.621 Euro. According to CBRE the current investment boom in the German capital will last. “Regarding size, price development and liquidity, the Berlin residential investment market is unique in Germany – and therefore very attractive for investors”, says Michael Schlatterer, Team Leader Market Intelligence at CBRE.