According to the latest Housing Market Barometer published by IBB Investment Bank Berlin, the climate for investments on the housing market of Germany's first city remains decidedly positive. In the eyes of the experts, market conditions are currently most favourable for the construction of condominiums. The investments climate for the development of rental flats and for modernisation and restructuring work is expected to improve.
IBB polls Berlin's housing market insiders once a year. For the Housing Market Barometer 2016, the bank asked local experts for their assessment of the present and future development on the residential property market in the rental and freehold segments, while also asking for the investment climate. For the first time, the 200 respondents moreover provided their view of the effectiveness of selected housing policy instruments.
The experts rated the investment climate for the development of condominiums as being anywhere between above-average and good anywhere in the city. They consider the investment conditions most auspicious in the boroughs of Pankow, Treptow-Köpenick, Mitte, Charlottenburg-Wilmersdorf, Tempelhof-Schöneberg and Steglitz-Zehlendorf.
Berlin's Housing Market is Marked by Pent-up Demand
Respondents across the board agreed that the “rent freeze” has barely shown any effect as rent control measure introduced to alleviate the housing shortage. In fact, it was deemed the least effective among the political instruments listed in the survey. The interviewees believe that nearly all segments of the housing market are characterised by pent-up demand. The only segment where demand does not outpace supply is the top rent bracket.
The strained situation on the residential market is not about to change in the foreseeable future. Especially the strain on the rental housing market, which is already under enormous pressure, is not expected to ease, in the opinion of the experts. Demand for compact and midsize flats in the lower and medium rent range was diagnosed as being particularly keen. In the bottom rent bracket of less than six euros per square metre, supply deficits were estimated to exist in all boroughs – most notably in Pankow, Mitte, Charlottenburg-Wilmersdorf, Steglitz-Zehlendorf and Neukölln. As far as homeownership goes, experts identified the greatest demand in the condominium segment.