IBB Housing Market Barometer: Berlin’s Residential Market Remains Strained
The situation on Berlin's housing market is not about to ease any time soon. That is what the 200 experts say who were polled for this year's Housing Market Barometer published by IBB Investment Bank Berlin. Once a year, the barometer provides insights and forecasts regarding the development on Berlin's residential real estate market. The experts estimate that demand for condominiums and rental flats in Berlin will maintain the current level for the next three years. In their opinion, however, there is a broad-based housing shortage which is causing the intense strain on Berlin's residential market. Indeed, the Barometer registered the highest level of strain on record in the history of the annual surveys, and not just across all rental categories, but also in each condominium segment.
Building Land Bottleneck Keeps Housing Market from Levelling out
This year's IBB poll confirmed that Berlin's housing market is in serious trouble. The list of cited issues is topped this year by the shortage of suitable building land. In recent years, this topic has kept gaining in significance, and is now identified as key problem by 41 percent of the polled experts. Another pressing problem is the growth in net rents. The one thing that would ease the situation on Berlin's housing market, according to the market insiders, is stepped-up development of rental flats in the lower and medium-price segment because this is where demand is keenest. By comparison, demand for rental units in the form of single-family detached homes, semi-detached units or terraced housing is much lower. Demand in the homeownership market is strongest in the sub-segment of condominiums measuring 45 to 100 square metres.
Confidence Boosted by Sound Investment Climate
Among the positive trends the experts diagnosed on Berlin's housing market is the record score that the investment climate for the construction of detached homes, condominiums and rental flats registered lately. Especially as far as rental flats go, the market is heading for a positive trend reversal, this being the market that consistently scored poorly in recent years. The State of Berlin will also keep investing in housing development in order to boost construction. Specifically, up to 32,500 new apartments in new development projects are to be sponsored in the coming years. The share of subsidised apartments equals roughly a quarter of the total residential area. These rental flats are to be made available at socially responsible rents.