Berlin’s residential and commercial property market defies political uncertainty

Anyone who has spoken to investors, lending banks, solicitors or estate agents about the Berlin market in recent months could easily have been left with the impression that transaction activity had largely ground to a halt. High financing costs, regulatory uncertainty and, most recently, political developments following the House of Representatives election have weighed heavily on sentiment.

The actual sales figures tell a different story

In the third quarter of 2026, 187 residential and commercial properties were sold individually in Berlin – almost as many as in the same quarter of the previous year, which saw 186 transactions. In the traditional market segment up to 20 million euros, the transaction volume actually rose by a good eight per cent to around 542 million euros. Over the first nine months, this segment’s turnover is therefore only a few percentage points below the previous year’s level.

“The discrepancy between market sentiment and the transactions actually completed is currently striking,” says Benjamin Rogmans, Managing Director of Engel & Völkers Commercial Berlin. “Anyone following only the political debates and the caution shown by individual investors might suspect a significant market slump. In fact, we are seeing a stability in the traditional residential and commercial property market that many other property segments are currently sorely lacking.”

Why the overall statistics paint a distorted picture

At first glance, the Berlin investment market appears to confirm the widespread scepticism. Including block deals, the transaction volume for rental residential properties – both with and without mixed-use elements – fell by around 29 per cent to €2.03 billion in the first nine months compared with the same period last year.

However, the decline is concentrated almost exclusively on large-volume transactions and package sales. Turnover from these alone fell from around 573 million to 120 million euros. Added to this are individual, exceptionally large sales in 2025, which significantly skew the year-on-year comparison.

When assessing the traditional residential and commercial property market, it is therefore far more meaningful to analyse the data by purchase price bracket.

The picture is significantly more stable for individual transactions up to 20 million euros. Over the first nine months, turnover in this price bracket stood at around 405 million euros, just under five per cent below the previous year’s figure. The overall sales figures also point to a recovery following the weak start to the year. The 127 individual sales in the first quarter were followed by 168 in the second and 187 in the third quarter.

A market where sellers are not waiting for the perfect moment

According to Engel & Völkers Commercial Berlin, this comparatively high level of stability has structural causes.

Unlike many institutional property investments, the supply in Berlin’s traditional apartment block market is largely characterised by private owners and families. Their decisions to sell are often driven by long-term personal and economic developments.

“An owner who has held their property for 10, 20 or 30 years does not sell simply because interest rates or the political situation have changed,” explains Rogmans. “It is often about transitioning to a new stage of life, retirement planning, succession, inheritance or the dissolution of a co-ownership association. The property has fulfilled its role in building wealth. At some point, the question inevitably arises as to what to do with it next.”

According to Engel & Völkers Commercial Berlin’s own surveys, motives related to age and life stages have been behind around half of all sales decisions for years.

Regulatory burdens, renovation requirements, the effort involved in property management or political developments can accelerate such decisions. However, the underlying motivation often runs deeper.

The generational shift in Berlin’s property portfolio therefore creates a supply that is far less dependent on short-term market sentiment than is often assumed.

Lower prices, new buyers

On the demand side, the market has also changed. Engel & Völkers Commercial Berlin has observed, in its own transaction business, that purchase prices – following the value adjustments already made in 2023 and 2024 – are currently around 15 per cent below the average level of 2025. This analysis is based on just under 100 transactions in the current year.

This opens up entry opportunities for buyers that were virtually unattainable during the period of low interest rates and the price dynamics of that time.

“We do not see a uniform buyer profile,” says Rogmans. “Private investors, family offices and institutional vehicles are once again very selectively considering acquisitions. They differ in their strategies, but in some cases recognise the same opportunity: to acquire residential and commercial properties in Berlin at prices that hardly anyone would have thought possible just a few years ago. Often, the buyers are also quite different from those of 5 or 10 years ago.”

The real bottleneck is equity

The key hurdle for many prospective buyers currently lies in financing.

Increasingly, this involves more than simply whether an investor can afford a particular interest rate. The requirements set by lending banks regarding equity, property quality and debt servicing capacity significantly limit the pool of potential buyers.

“The bottleneck is often no longer a fundamental willingness to invest, but rather the ability to secure financing,” explains Rogmans. “Anyone who can provide sufficient equity and demonstrate a robust financing plan now has access to properties and negotiating opportunities that have not been available in this form for a long time.”

This is also shifting the balance of power between buyers and sellers. Whilst in earlier market phases the availability of suitable properties was often the decisive hurdle, today it is frequently the buyer’s capital resources that are the deciding factor.

This also explains why lower prices do not automatically lead to a sharp rise in transaction numbers. Interest is there, but not every prospective buyer can actually finance a purchase.

Berlin’s multi-tenanted residential property market follows a long-term logic

The latest figures from the Valuation Committee thus indicate more than just short-term stabilisation. They make it clear that the traditional residential and commercial property market is driven by factors that extend beyond individual economic cycles and political events.

On the sellers’ side, these include long-term ownership cycles, demographic trends and personal wealth management decisions. On the buyer’s side, changing price levels intersect with varying investment strategies and levels of capital. In between, financial viability determines which transactions go ahead.

The economic fundamentals of the city remain sound. Berlin is the capital, a hub for science and business, and an international magnet for skilled workers, start-up founders and students. At the same time, the supply of housing remains tight.