Real estate prices in Berlin are the lowest among all major cities in Europe and Germany. Indeed, buying an apartment in Berlin costs generally 5 times less than in London and 3 times less than in Paris. Comapred to local housing market, the square meter price in Berlin is 2-3 times less expensive than in major german cities like Hamburg, Munich and Frankfurt (for an equivalent location and home 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 and 12,7% in 2017) sustained by tremendous residential housing demand.
In recent years, the German capital has experienced a growing popularity among foreign investors, both private and institutional. As a result, the volume of real estate investments has increased threshhold to reach a rate of 10 billion euros per year (against 3 billion in 2014). Moreover, the German capital 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 the 7th place, Copenhagen in the 6th, Barcelona in the 16th places followed by Paris in the 17th place while London ranks only 27th out of 30 ranked cities, particularly in view of the economic and monetary risks related to the process of Brexit.
For historical reasons, the city has a particularly low property home 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 local property market. The high occupancy rate (about 98%) and the strong 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 the German capital 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 vacant houses. 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.
|APARTMENTS FOR SALE IN BERLIN|
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.
This trend of catching up of real estate prices in Berlin with other European capitals and the prospects of real estate gain are among the main drivers to invest in real estate in the city.
The table below clearly illustrates this dynamic of the local real estate market with double-digit price increases.
|Districts and areas||Berlin property prices development in 2017|
|Charlottenburg - Wilmersdorf||+10,7%|
|Friedrichshain - Kreuzberg||+11,0%|
|Tempelhof - Schöneberg||+12,6%|
|Treptow - Köpenick||+4,9|
Source: CBRE 2018
The median residential Berlin property price is around 3706€ per m2 (424 USD per square foot) by early 2018.
This figure is an overall average that combines the price of vacant properties (Eigentumswohnungen) and long-term tenanted properties (called Kapitalanalage), generally sold at discount that can reach 35% on certain investment properties. This difference is due to a very strong demand and a very limited offer for vacant homes (either for rent or sale) in Berlin property market. Please, note that the occupancy rate is at record of more than 98% currently.
In early 2018, the property prices in Berlin central districts are the following:
The price of vacant apartments in Berlin Mitte starts at 5200€/m2 for period buildings. For historical reasons and the construction of Berlin wall, there are very few offers of properties for sale in period buildings in Mitte. However, home buyers have more choice in the new build promising projects 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 prices for already tenanted homes 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 (a one bedroom apartment is still affordable from ca. 270.000€). There are some new build projects under construction with prices starting at 6000 € / m2. For a rented apartment with a reduced yield, prices start around 3800 euros per m2.
Apartment prices in Berlin Friedrichshain start around 4000 € / m2 in period buildings. For buyers looking for a taste of history, it is possible to buy an apartment on the Karl-Marx Allee in classified stalin speriod style buildings (reputed for their robustess and functional plans) for a slightly higher price level. There are some new build projects from 5500 € / m2 but those 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 a deep transformation and a strong demand, particularly from home buyers from Nordic countries, Brits and also French nationals. The most requested areas are located in the Schilletkiez, near the docks and around the Richardplatz. For a property investment (rented-out apartment with a reduced yield), the price per sqm is around 2800 euros.
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 higher than 5000 € / m2 for a vacant apartment (ca. 270000€ for one bedroom vancaant flat) 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.
House prices in Berlin Charlottenburg, a very coveted neighborhood, start from € 3800 / m2 in sixties buildings in the north of Charlottenburg. Price for period building starts at 4700 € / m2. The most sought-after areas are around Savignyplatz, Kurfürstendamm and Oliverplatz where a one bedroom apartment is still affordable at ca. 250.000€. For a property investment, the prices of the apartments start at around 3000 € / m2.
House prices in Berlin Wilmersdorf differ significantly according to the location. Grünewald and the area around Roseneck are relatively expensive with prices starting around 4500 € per sqm. In other locations, such as the Fehrbelliner Platz, prices start around 4000 € per sqm. The prices of rented apartments start at around 3300 € per sqm.
A quite and family sought-after neighborhood, house prices 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.
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 of 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 homes and the high demand on residential housing.
For investos looking for a buy-to-let property with a significant potential for capital gain, it would be a good idea to buy a property that is already tenanted. Example:1 bedroom 60m2 apartment in Kreuzberg currently offered for sale for 190.000€, would have a value of 300.000€ if it was vacant.
Our real estate agents are at your disposal for more information about the Berlin property market, the purchase and rental process in Germany and to search for discounted properties for sale.
Our real estate agents will also support you with a comprehensive property consutancy covering all realted topics like financing possibilities, mortgage rates, rental levels, rental income and tax advantages of a property investment in Germany.
*The property prices graph shows the general level of housing prices in Berlin central districts. 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 Berliner home buyers give a high importance.
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