Friday, 4 March 2011

Residential Property in Berlin: Rent and purchase prices keep rising

Rent and purchase prices for residential properties in Berlin keep rising. This is the conclusion of the 2011 Residential Market Report (Wohnmarktreport für Berlin) by GSW Immobilien AG and CB Richard Ellis. Despite growing demand and sluggish development of construction the report sees no danger of an actual shortage of residential offers.

On average rents and purchase prices for residential properties have increased by 4 % to 8 % in 2010. A continuation, even acceleration of last year’s market development. Looking at different market segments by location the picture somehow varies: Better locations benefit more than lower market properties.

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According to the study average rents increased by 4.5% compared to 2009 from 5.85 to 6.11 Euro per square meter per month (€/m²). The cheapest 1/10 only went up by 2.9% moving to 4.30 €/m².

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A drastic rise by German standards was experienced for apartments with high value standard. The average rent increase of the top 1/10 went up by 14% to 10.96 €/m² and purchase prices for condos by 7.9 % to an average of 1,739 €/m².
Across all market segments locations were just as spread in their development. Charlottenburg-Wilmersdorf took the lead in the districts table with an increase of 10.2 % to an average of 7.52 €/m² across all quality segments. Followed by Freidrichshain-Kreuzberg at 7.22 €/m² and Pankow ant 6.90 €/m². The low end is made up by Reinickendorf (5.56), Spandau (5.26) and Marzahn-Hellersdorf (4.69).

According to the study the main factors contributing to this development are the growth in population and job-opportunities accompanied by smaller households (heads per household). On the supply side the number of newly build apartments was very low throughout the last 10 years and has remained at that level in 2010. A price increase is only natural.

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Uwe Falkenberg 


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