Good Prospects For Homebuyers – Berlin Housing Boom Is Not Ending
Berlin will probably exceed the 4 million-inhabitant mark by 2030. This is the result of the forecast presented by the Senator for Urban Development, Andreas Geisel, last week. Accordingly, the Senate expects the positive demographic trend of the last years to continue and suggests that it might even accelerate. Predictions show that solely in 2015, the number of inhabitants increased by up to 50,000. The number of refugees arriving in Berlin has not been taken into account yet. According to experts, there have been around 100,000 refugees in 2015. This will also affect the local housing market.
Berlin Necessitates Up To 20,000 Flats Per Year Until 2030
Senator Geisel now suggests that each year between 15,000 and 20,000 apartments would have to be built by 2030. Before, Berlin’s development plan projected an annual requirement of 10,000 flats. However, the real estate sector has not yet been able to reach this volume of new constructions. The construction of only slightly more than 7,000 new apartments was completed in 2014. Therefore it is likely that the housing market might lag behind the rapid population growth in future, too. It is questionable whether the annual required number of between 15,000 and 20,000 apartments could actually be completed. Fact is that in 2015, the Statistical Office for Berlin-Brandenburg recorded a significant drop of nearly 8% in the number of authorised new apartments.
No Slowdown Of Rent Increases
These are good prospects for homebuyers since rents are also expected to rise in future. Consequently, apartments serving as a capital investment will still remain very attractive despite of legal amendments such as the Rental Price Brake. If a very high demand for rental housing meets a low rental offer, rents will inevitably continue to increase. On the international real estate market no similar trend has been discerned before, too. Also Scandinavian countries have already tried such rent control laws – but so far without success. Another example is Austria, where tenancy laws are significantly stricter than in Germany. Nevertheless, over the years rents and consequently purchase prices have significantly increased there, too. So, best prospects for investing in residential properties in Berlin.