Following the current Berlin 2017 standard rates table, which was presented to the public on May 19th by Berlin`s Senator of Urban Development Katrin Lompscher, the rental rates of Berlin have increased by 4.6% per year within the last 2 years, a growth by a whole 1.9% compared to the previous period of observation.
Up to 13 Percent Plus
Especially in good locations like Steglitz-Zehlendorf, Charlottenburg-Wilmersdorf and Mitte, apartment owners are pleased with a particularly strong dynamic, with increasing rents up until 13 percent to 7.41 Euros per square meter. In Berlin average, the current net cold rent is situated at 6.39 Euros per square meter. This equals a price increase of 55 cents per square meter and month, compared to the level 2 years ago.
Old Apartments Significantly More Expensive
Overall, the average growth was 6.3 percent annually. Residential areas like Friedrichshain-Kreuzberg, Neukölln or Pankow even record increases of 9,3 percent. Whereas 5.86 Euros were still asked per square meter back in 2015, it are already 6.42 Euros today. Living in old apartments remains most expensive. For ‘Gründerzeit’ apartments in mid-level residential areas, tenants already have to pay averagely 16.4 percent more compared to the state 2 years ago, as long as the living space does not exceed 90 square meters.
Also New Housing Developments Affected
With an increase of 10.20 Euros per square meter in average, absolute rents remain the highest in new housing developments. Following the current rent index, especially singles are affected by high net cold rents: for a newly build apartment in mid-level location with heating, bathroom, inset lavatory and living space up until 40 square meters, they have to calculate with prices of averagely 14.10 Euros per square meter. Apartments above 90 square meters living space still call up 10.70 Euros per square meter.
Problems in Berlin Housing Policy
Following Senator of Urban Development Lompscher, the significantly rising rents mainly trace back to the following 2 reasons: the unstoppable attractiveness of the German capital with the housing shortage resulting thereof, as well as limited possibilities to regulate rents. Even if the Berlin Senate has taken the right path to counteract the tense housing market situation considering new threshholds, rental price brakes, increased new construction activity and expansion of environment protected areas, convincing success remains elusive. The regulatory tool of the rental price brake even leads to faster rental growth against expectations.
Continuous Construction and Rental-TÜV
Our hopes are therefore directed towards new housing developments. Even SPD and FDP seem to agree upon the fact, that a continuous rental increase due to housing shortage can only be managed by means of continuous construction. The FDP even goes as far as demanding the introduction of a ‘Rental-TÜV’, which allows to examine, in how far new regulations by the government affect building costs. This measure follows their critique, that the Berlin Senate scares off private investors with the introduction of excessive constraints.
Your Accord Estates GmbH Team