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Towns in the Metro Region Benefit from Berlin's Growth

Berlin's population keeps growing steadily. At the same time, property prices are being driven up by strong demand on the one hand and short supply on the other. Berlin is now home to 3.5 million people, a number that is expected to rise to roughly 3.7 million by 2030. This makes it reasonable to assume that the city's housing market will remain strained and pricey for some time to come. Over the past ten years, asking rents in Berlin have gone up by 55 percent. Condominium buyers pay higher square-metre prices. Indeed, prices have increased by an average of 75 percent since 2004. The situation in Potsdam is quite similar.

Here, in Brandenburg's state capital, rents rose by one third over a ten-year period, matched by a purchase price hike of more than 33 percent since 2004. It is a trend that makes Brandenburg's rural towns increasingly attractive for tenants and buyers both, or so the findings of the latest housing market report “East Germany 2016” by TAG-Immobilien AG suggest.

Heavy Inflow from Berlin

Towns in Brandenburg such as Nauen (County of Havelland), Brandenburg an der Havel, Eberswalde (Barnim) and Strausberg (Märkisch-Oderland) are already registering a heavy inflow from Berlin. Of key significance for the new arrivals is obviously a convenient commute to the city. The better the transport links to Berlin, the more attractive the suburban location. The population in Nauen, for example, has grown since 2003 and is expected to keep growing by a further 1.8 percent between now and 2030. To support the upward trend, an expansion of the railway network to allow commuter trains to run more frequently is currently under review. Even the town's integration into Berlin's rapid transit network is not ruled out. Nauen's rising popularity is reflected in local rents and prices. Between 2011 and 2016, rents rose at an average of more than 28 percent, prices by 6.6 percent.

But the steepest price hikes among Brandenburg's mid-size cities were reported from Strausberg. Rents here have soared by more than 30 percent over the past four years, prices for private homes by 33.8 percent. Then again, residential rent and price levels remain moderate compared to nearby Berlin. TAG believes the trend is here to stay, and that the number of people moving out into the gravy belt of Berlin and Potsdam will keep increasing. Secondary cities like Strausberg, Nauen or Eberswalde appear to have become attractive alternatives. As Berlin keeps growing, surrounding towns and communities benefit from the spillover effect. While being to some extent due to the generally sound economic situation, the positive development of towns in the State of Brandenburg, which surrounds Berlin on all sides, is mainly explained by their relative proximity to Berlin and their accessibility. They are a key argument for leaving the costly city in favour of a more affordable life in suburbia.