Real estate prices in the German capital are the lowest among all major cities in Europe and Germany. Indeed, the property price of an apartment in Berlin is generally 5 times less than London, 2 to 3 times less than Paris and 2 times less than Munich for an equivalent location quality. With the booming of the real estate market in the city, the catch-up of property prices in Berlin compared to other European capitals continues with double-digit price growth (10.1% in 2015 and 9,6% in 2016) sustained by tremendous residential housing demand.
In recent years, the German capital has experienced a growing popularity among foreign investors, private and institutional. As a result, the volume of real estate investments has increased threefold to reach a rate of 10 billion euros per year (against 3 billion in 2014). Moreover, Berlin is currently ranked first among all major cities and capitals in terms of quality of real estate investment, particularly in terms of profitability and the prospects of capital appreciation and profit on resale. In the same ranking, there is Lisbon in 7th place, Copenhagen in 6th, Barcelona in 16th place followed by Paris in 17th place while London ranks only 27th out of 30 particularly in view of the economic and monetary risks related to the process of Brexit.
For historical reasons, Berlin has a particularly low property ownership rate with less than 20% of owners (compared to 55% national average in Germany) which leaves a very significant margin of the long term development of the Berlin real estate market. The high occupancy rate (about 98%) and the population growth (more than 50,000 people a year), support the demand for housing and are important factors of rapid growth of real estate prices in Berlin.
The most popular and expensive areas of Berlin are the most international districts of Prenzlauer Berg, Mitte and Kreuzberg, which are experiencing a very high scarcity in the supply of properties for sale. Friedrichshain district has prices that are generally 10-15% lower depending on the location. Neighborhoods such as Charlottenburg, Wilmersdorf and Schöneberg, which are more residential, have real estate prices around 10% lower than "international" neighborhoods. The districts of Wedding, Moabit, and Steglitz have real estate prices of about 3500 € / m2 for free. It should be noted that the district of Neukölln is currently the most dynamic of the whole city and has a very promising potential for investment with prices of approximately 25% cheaper than Prenzlauer Berg as an example.
These figures are of course general and vary significantly depending on the micro-location of the property in the neighborhood. In this sense, a property located in the best locations of Prenzaleur Berg can far exceed an average location in Mitte. Similarly, a property in the highly sought after Schillerkiez in Neukölln will be more expensive and sold faster than a property around Charlottenburg Castle.
Real estate prices evolution in Berlin
This trend of catching up real estate prices in Berlin compared to other European capitals and the prospects of real estate gain are among the first factors to invest in real estate in Berlin.
The table below clearly illustrates this dynamic of the Berlin real estate market with double-digit price increases.
Berlin real estate prices development
|Districts and areas||Berlin property prices growth % in 2016|
|Charlottenburg - Wilmersdorf||+9,4|
|Friedrichshain - Kreuzberg||+8,9|
|Tempelhof - Schöneberg||+21,0|
|Treptow - Köpenick||+5,0|
Source: CBRE Wohnungsmarktreport
The average Berlin property price was around 3290€ per m2 (355 $ per square foot) by early 2017.
This figure is an overall average that combines the price of apartments sold free (Eigentumswohnungen) and those sold rented (called Kapitalanalage) sold with a discount that can reach 35% on certain investment properties. This difference is due to the very strong demand for vacant housing and the very limited supply of vacant flats on the Berlin market.
In early 2018, the property prices in Berlin in central districts are around these levels:
The price of vacant apartments in Berlin Mitte starts at 5200€/m2 for period/existing buildings. For historical reasons and the construction of Berlin wall there are very few offers of period apartments in Mitte. However, buyers have more choice in the new with promising real estate programs in terms of capital gain with prices starting at 5500€/m2. It should be noted that Mitte has a special status with a concentration of international demand on this most central district of Berlin. Investment properties (already tenanted) start around 4000€/m2.
Currently the most sought-after district of east Berlin, the real estate prices per m2 in Berlin Prenzlauer Berg start from 4300 € / m2. The most demanded zones are around Helmholtzplatz, Kollwitzplatz and Kastanienallee and the prices there start rather from 5000 € / m2. There are some new projects under construction with prices starting at 6000 € / m2. For a rented apartment with a reduced yield, prices start around 3800 euros per m2.
Apartments prices in Berlin Friedrichshain start around 4000 € / m2 in the old. For buyers looking for taste of history, it is possible to buy an apartment on the Karl-Marx Allee Stalinist style (reputedly very robust and classified buildings) for a slightly higher price level. There are some new projects from 5500 € / m2 but that can reach 8000 € / m2 on the docks near the Mercedes-Benz Arena. The average price for the purchase of a tenanted apartment (investment properties) in the district of Friedrichshain start around 3000 euros per m2.
The property prices in Neukölln in period buildings start around 3800 € / m2. The neighborhood is undergoing profound transformation and strong demand, particularly from buyers in the Nordic countries, brits, and also French. The most requested areas are located in the Schilletkiez, near the docks and around the Richardplatz. For a property investment (already rented with reduced yield), the price per m2 are around 2800 euros per m2.
The property prices in Kreuzberg in period buildings start around 4300 € / m2 and are increasing strongly because of the scarcity of property and the classification of some areas especially around the Markthalle 9, the Begmannkiez and Wranglerkiez where prices are greater than 5000 € / m2 for a vacant apartment. For an investment (rented apartment) in Kreuzberg, the purchase price starts around 3800 euros per m2.
This central neighborhood between East and West also has a scarcity of properties for sale and prices start around 4200 € / m2. The best areas are around Akazienstr. and Winterfeldplatz. There are some new projects near the Diplomatic Quarter with prices starting from 5500 € / m2. For a rental investment (already rented apartment) the purchase price starts around 3000 euros per m2.
The real estate prices in Charlottenburg, a very coveted neighborhood, start from € 3800 / m2 in post-war buildings and especially north of Charlottenburg. Prices for period buildings start at 4700 € / m2. The most sought-after areas are around Savignyplatz, Kurfürstendamm and Oliverplatz. For a property investment, the prices of the apartments start at around 3000 € / m2.
The prices of real estate in Wilmersdorf differ according to the location. Grünewald and the area around Roseneck are relatively expensive with prices starting around 4500 € / m2. In other locations, such as the Fehrbelliner Platz, prices start around 4000 € / m2. The prices of rented apartments start at around 3300 € / m2.
A quite and family sought-after neighborhood, prices per m2 in Berlin Steglitz start at around 3500 /m2 and have a good potential given the development of the neighborhood around Schloßstrasse.Investment properties prices (already tenanted) start around 2500€/m2.
The real estate prices for vacant apartments in Wedding start around € 3300 / m2 for period building and the neighborhood offers a good rental investment in Berlin because of its proximity to Mitte. For a property investment, prices start at around 2500 euros per m2. euros per m2.
Property prices in Moabit start around 3500 € / m2 for vacant apartments. The most demanded areas are around Kaiserin-Augusta Ufer, Stephankiez and Huttenkiez. The district offers a good investment option in Berlin because of its proximity to Mitte and Charlottenburg. The rented apartments are sold at around 2700 € / m2.
Apartment prices in Berlin for already tenanted properties in Berlin could represent a discount of up to 35% compared to the price for similar vacant properties on the market. This is due in particular to the shortage of vacant apartments and the high demand on residential housing.
For buyers looking for a property investment in Berlin (buy-to-let) with significant potential for capital gain, this could be a good option to buy at a very good price per m2 in Berlin.
Our real estate agency is at your disposal for more information about the Berlin market, the purchase and rental process in Germany and the property prices in each district of the city.
Our real estate experts will also inform you about financing possibilities, mortgage rates, rental levels, rental income and tax advantages of a property investment in Berlin.
*The map shows the general level of Berlin property prices. Please, note that within a single area, prices can vary significantly based on criteria such as the status (vacant or tenanted), the yield, the year of construction and the micro location for which Berliners gives a high importance.
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