Germany's capital is welcoming a new influx of real estate investors, as the city's comparatively low rents attract expatriates, young creatives and technological entrepreneurs alike. Home to 2,500 tech start-ups, Berlin has been dubbed Europe's 'Silicon Valley', attracting the interest of the world's largest venture capital funds. In 2013, Microsoft founder Bill Gates invested heavily in ResearchGate, a local start-up designed to promote international scientific communication and collaboration. Among all this, the historical landmarks of Germany's capital still stand tall, with world-class museums, galleries and architecture providing a classical counterpoint to the rush of futuristic businesses.
The 2008 economic recession affected housing markets globally, but Berlin weathered the storm considerably more successfully than the majority of its global competitors, emerging relatively unscathed. In the years since, the real estate market has gone from strength to strength; since 2011, property prices in Berlin have risen an average of 25.5% in total. Sebastian Fischer of Engel & Völkers Berlin told the New York Times that throughout the international economic troubles, Germany has remained "a safe-haven economy in the Eurozone, with a stable currency and general positive outlook."
A bright future
In their annual report on 'Emerging Trends in Real Estate Europe 2015', PwC and the Urban Land Institute named Berlin as the leading city for international investment. The commentary observes that "international and domestic investors are swarming to the German capital, lured by what they consider [to be] relatively inexpensive assets and development opportunities." Fischer accredited the city's real estate market success to similar attractions: "extremely strong demographics, a constantly growing economy and very high quality of living".
Although property prices are rising, Berlin property remains relatively inexpensive compared to other European capitals like London or Paris. Berlin's property prices remain lower than other German cities too, especially Munich and Frankfurt. This has been attributed to reunification: until the '90s, Berlin was split by the Berlin Wall into east and west. A desirable neighbourhood for start-ups, students and creatives, the property market in east Germany nevertheless has yet to reach the values registered in cities in the west of the country.
Although Germany has traditionally been a country of renters, in recent years more young Germans have started to purchase property, creating a small boom as demand begins to outstrip supply. There has also been an increase in buyers from the United Kingdom, America, and France.
As developers seek to capitalise on Germany's reputation as a safe haven for investments, new high-end homes are springing up across the capital. Acclaimed British architect David Chipperfield's hotly-anticipated project, Palais Varnhagen, is a luxury apartment building on Französische Strasse. Inspired by the salon culture of 19th century Europe, the design is intended to inspire similar soirées among residents of the penthouses and apartments.
To begin your search for investment properties in Berlin, contact Engel & Völkers. With 11 offices in the city, whether you're looking for a converted loft or historic townhouse, our agents are here to help. For city centre apartments, visit our office in Berlin Mitte, or browse through beautiful historic properties at our Berlin Charlottenburg office. For larger properties on the outskirts of the city, visit our Berlin Grunewald office.