Market Report Residential & Commercial Buildings Berlin H1 2025: Property Prices & Locations at a Glance

More transactions in the medium price segment

The Berlin market for residential and commercial buildings is showing renewed strength in 2025. Both nationally and internationally, the German capital continues to enjoy great popularity among investors.

This becomes particularly evident when looking at the transaction data: After the number of transactions (+12% year-on-year) and the transaction volume (+43% year-on-year) already rose sharply in 2024, the market revival continued in the following year. In the first half of 2025, around 10% more sales of residential and commercial buildings were recorded in Berlin compared to the first half of 2024. Most transactions took place in the districts of Charlottenburg-Wilmersdorf (37 deals) and Steglitz-Zehlendorf (37 deals).

The focus of many prospective buyers is on the mid-price segment between €2.5 and €7.5 million, where market activity has increased particularly strongly. In addition to private investors and family offices, who have already been active in recent years, international investors are now showing a growing presence in the investment property market. As a result, Berlin is continuing to gain importance in an international comparison.

Institutional clients, on the other hand, are primarily interested in the high-price segment above €50 million. However, supply in this category remains scarce. Consequently, the transaction volume, including portfolio sales, remained at a similar level in the first half of 2025 as in the same period of the previous year. Overall, despite ongoing economic and political challenges, demand for apartment buildings in the German capital is on the rise.

Focus on unmodernised investment properties

The positive market development is also supported by a broad acceptance of current price realities, which is increasingly bringing buyers and sellers together. Compared to other German and European metropolitan areas, price levels in Berlin remain favorable and continue to strengthen purchasing activity. Prices have also been stable for more than a year. This currently allows for an attractive market entry at lower capital values than two or three years ago, while at the same time providing greater planning security for real estate investments.

In light of the strict requirements for financing, this is a significant factor. In addition to high equity ratios, buyers today must also comply with obligations for necessary refurbishments. Limited new construction activity, combined with the prospect of higher CO₂ costs for non-renovated buildings, is expected to further increase renovation pressure in the coming years. As a result, residential and commercial buildings from the 1950s to 1970s are already moving into the spotlight of investors, as they are particularly suitable for serial refurbishment measures.

This development is further fueled by the currently large supply of yield properties in need of modernization. A key locational advantage of Berlin is its very high rental demand. While asking rents remained stable in the first half of 2025, they have been rising moderately again since the summer. The gap to existing rents remains significant – meaning modernizations continue to offer substantial potential. The recently extended rent cap is unlikely to halt this trend.

At the same time, low levels of new construction are intensifying pressure on the market. With Berlin’s population continuing to grow, demand for housing is rising further, while supply remains scarce. The vacancy rate of just 0.3% illustrates the tense situation. For property owners, this provides the security of minimal rental default risk. Considering Berlin’s strong fundamentals, the current price level, and the market’s ongoing focus on the residential asset class, the city’s residential and commercial building market continues to offer excellent investment opportunities. Engel & Völkers Commercial therefore expects a strong second half of 2025 and rising transaction numbers for the full year.