Berlin is in high demand, be it as a colourful cultural city, an important economic and industrial centre or a respected university location. This is also reflected in the residential and housing market. Berlin property prices have been rising constantly for years. The capital has the reputation of being one of the most expensive cities in Germany, alongside Munich, Hamburg or Stuttgart.
Despite the tight market situation, the metropolis on the Spree still offers plenty of potential for investors, tenants and families who are considering buying property in Berlin. Our market report provides information on current rent levels in Berlin, price levels in the individual districts of the capital and how property prices are likely to develop in the future:
1. Current developments on the Berlin property market
A combination of persistently low interest rates and a steadily growing population makes Berlin one of the most sought-after residential property locations in Germany. Currently, more than 3.7 million people live in the German capital, which corresponds to a growth rate of +5.8 percent since 2014. Although the supply of residential space in the city's sought-after locations is correspondingly scarce, the potential for new building developments in Berlin has not yet been exhausted.
The low vacancy rate of 0.9 percent also shows that residential space is in such high demand in Berlin. However, this figure is still higher than that of other German metropolises such as Hamburg (0.5 percent) and Frankfurt am Main (0.4 percent).
2. Berlin property prices for condominiums
Price increases have also been recorded for the purchase prices of condominiums in Berlin. Last year, buyers paid an average square metre price of 4,909 euros for existing properties. Prices in this sector thus rose by +8.39 percent compared to 2019.
Growth was slightly lower in the case of new construction projects, but here too a constant increase in the price level can be observed. One square metre of living space in a new building in Berlin cost an average of 6,597 euros in 2020, which corresponds to an increase of +3.22 per cent.
3. Berlin property prices for single-family homes
Thanks to its diversity, Berlin is also an attractive place to live for families. This can be seen from the real estate prices for single-family homes in the capital, which remain at a consistently high level. The average price for a single-family house in Berlin last year was 799,772 euros. This means that prices fell slightly by -2.3 percent compared to the first half of 2019.
4. Berlin property prices for apartment buildings
A residential and commercial building or apartment building was sold for an average of EUR 5,594,200 in the first half of 2019, an increase of 29.1 percent over the first half of the previous year. The average asking price was EUR 3,311 per square metre. Due to the rent cap decided by the Berlin Senate to freeze rents, slight price declines are to be expected.
5. Berlin property prices by district
Depending on the location, Berlin property prices vary considerably - this applies to single- and two-family homes as well as condominiums. Naturally, the districts close to the city centre are among the most sought-after residential locations, but the outer districts are also increasingly attracting the interest of buyers.
The districts of Mitte, Charlottenburg, Wilmersdorf, Schöneberg, Grunewald, Zehlendorf, Lichterfelde as well as parts of Westend, Prenzlauer Berg, Frohnau, Hermsdorf and Kladow belong to the districts in very good locations. Single- and two-family homes in these districts have the highest price level in Berlin and achieve top prices of between 800,000 euros and 9 million euros. Square metre prices for condominiums range between 5,500 euros and 21,000 euros.
Districts in good locations are those close to the city centre, such as Kreuzberg and parts of Prenzlauer Berg, which are particularly popular with young people. However, districts further afield such as Spandau, Steglitz, Waidmannslust and Friedrichshagen also partly fall into this location category. The local price level for single- and two-family homes in these parts of Berlin ranges between 600,000 euros and 6.5 million euros. Condominiums in these districts achieve average square metre prices of between 4,300 euros and 9,000 euros.
Districts in mid-range locations include Neukölln, Weissensee, Lichtenberg, Pankow, Wedding and parts of Tempelhof. In the mid-range segment, property prices for single and two-family homes in Berlin range between 400,000 euros and 1.5 million euros. Investors who are considering buying a condominium can expect square metre prices of between 2,700 euros and 7,000 euros in these districts.
The lowest asking prices are for properties in districts in secondary locations. These include above all districts to the east such as Marzahn, Hellersdorf and Hohenschönhausen. Furthermore, Reinickendorf and large parts of Rudow and Tempelhof are also considered secondary locations. The prices for single- and two-family homes range on average between 300,000 euros and 650,000 euros. Asking prices for condominiums in these Berlin districts range between 2,300 euros and 4,500 euros per square metre.
Engel & Völkers Berlin
6. Forecast: will Berlin property prices continue to rise?
At present, Engel & Völkers does not anticipate that property prices in Berlin will fall in the foreseeable future. Instead, Christian von Gottberg and Günter Fischer of Engel & Völkers Berlin forecast that the positive price trend will continue: "The metropolis of Berlin remains extremely attractive for real estate buyers. Especially in these unmanageable times, we feel that the value "property" is more in demand than ever. Nevertheless, the current real estate market is not predictable due to legal regulations: Politics does not promote the stabilisation of the markets, but instead creates an artificial impairment. We are constantly focusing on the new developments and are observing whether they continue in this direction".
You can obtain even more in-depth insights into the residential property market of the 64 most important cities in Germany in our current Residential Property Market Report for Germany 2020/2021 or in a personal meeting with Germany’s fairest real estate broker. We look forward to hearing from you.
Further property prices
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Sources by chapter:
Berlin property market: current trends: City of Berlin, CBRE-empiricia vacancy index, Engel & Völkers Residential, Engel & Völkers Commercial
Berlin property prices for condominiums: empirica-systeme, Engel & Völkers Residential
Berlin property prices for single-family homes: empirica-systeme, Engel & Völkers Residential
Berlin property prices for apartment buildings: Gutachterausschuss Berlin, empirica-systeme, Engel & Völkers Commercial
Berlin property prices by district Engel & Völkers Residential, Engel & Völkers Commercial