Rapid Price Growth for New-Build Condominiums in Berlin
Two surveys conducted by the Bulwiengesa research institute in late 2020 revealed that prices for new-build condominiums in the inner city of Berlin have soared drastically. For the purpose of the surveys, Bulwiengesa analysed 25 residential construction projects in the western end of Berlin’s inner city and 16 projects in the eastern downtown districts. Year on year, square-metre prices increased by 16 and 18 percent, respectively, as the Immobilien Zeitung real estate trade paper reported.1
For its market survey of the City-West locality, Bulwiengesa examined building projects that involved five flats or more in the districts of Charlottenburg, Kreuzberg, Schöneberg, Tiergarten and Wilmersdorf. Here, the average asking price for a condominium was 8,610 euros per square metre by the end of 2020, which implies an annual increase by 16 percent. Among the building project studied, the researchers found only one single condominium that was offered for a selling price of less than 6,000 euros per square metre.
Noticeably Fewer Listings than the Previous Year
One reason for this hefty price hike is probably that supply has visibly contracted. Bulwiengesa identified only 25 construction projects with a combined total of 1,300 residential units, down from 33 projects and a total of nearly 2,700 residential units last year. This means that the number of new-build condominiums on the market in downtown West Berlin is just half of what it used to be.2
Supply in the eastern part of the inner city contracted as well, though not as drastically as in the western part. The 16 construction projects examined here in late 2020 added up to a total of 1,276 flats, which is a six-percent decline year on year, down from 1,425 flats. This continues a downward trend in the number of new-build condominiums that Bulwiengesa had already noted between 2018 and 2019, diagnosing a drop by nine percent at the time.3
Condominiums Remain Popular
The steadily contracting supply is also reflected in the price trend in the eastern parts of the inner city. By the end of 2020, listings for new-build condominiums in the City Ost locality quoted an average price of 8,370 euros per square metre. This implies a year-on-year price growth of 18 percent. With a price tag of 13,800 euros per square metre, Bulwiengesa identified the most expensive condominiums in the borough of Mitte.
In addition to short supply, however, the brisk price growth is also attributable to increased technical requirements and to high land prices, according the Bulwiengesa. The stiff prices for plots of lands are probably caused, again, by the fact that limited supply is matched by strong demand. In any case, the very positive price trend illustrates that condominiums in Berlin’s inner city remain a coveted commodity despite COVID-19 and despite the price hikes of recent years.