The trend barometer 2017 portrays a positive image of the German real estate market. As a current study of Ernst & Young – Real Estate shows, the Berlin property market continues to interest investors. A questioning of 135 professional real estate investors demonstrated, that the German real estate market continues to be attractive to more than 96% of all investors, particularly focusing on the capital, the most popular investment location.
This way, Berlin was able to asert itself in the pouplarity among investors from locations like Frankfurt, Munich, Lipsia, Dresden and Düsseldorf. The 5 most important factors centering around the potential of the Berlin property market and reasons for an investment in the capital are therefore summarized in this blog article.
Berlin Property Cheap Compared to Other Metropolises
For one of the world`s major cities, Berlin property prices are still exceptionally far below the levels of other metropolises. Whereas the prices for a 120 square meter apartment on the Berlin property market are round about 4.900 Euro per square meter momentarily, comparable prices in other European capitals are considerably higher. In London, the same object would cost 30.000 Euro minimum, in Paris still 16.000 and in Rome 7.000 Euro at least.
Exactly this discrepancy between the market prices is what constitutes the enormous potential of the German capital. Already within the last 8 years, the average level of prices for a Berlin condominium could be raised by 86%. The timing for an investment could not be better, especially because this trend is definitely going to continue.
Apartment Prices Continuously Rising
In 2016, the average offering price of a Berlin condominium increased by full 9.6% to 3.289 Euro per square meter compared to the previous year. The average price per square meter was highest in Berlin Mitte with 4.139 Euro, closely followed by Friedrichshain-Kreuzberg with 3.926 Euro and Charlottenburg-Wilmersdorf with 3.713 Euro. These figures result from the Housing Market Report published by the CBRE and Berlin Hyp, based on more than 83.000 rental offerings and 62.000 advertisements as its sources.
Increasing Rental Prices
Even if the rents within the individual districts of Berlin develop heterogenously, quoted rents in 2016 increased by 5.6% to almost 9,00 Euro per square meter overall. Still, the range reaches from increases of 2.7% in Charlottenburg-Wilmersdorf up to 17.1% in Berlin Neukölln. Therefore, Neukölln is among the top 3 of rental growth together with Marzahn-Hellersdorf (+10.2%) and Friedrichshain-Kreuzberg (+7.5%).
In just a few years, Berlin has been growing averagely by 40.000 inhabitants per year. In 2015, this number even increased to almost 100.000, as round about 57.500 registered asylum seekers had to be added to the usual growth. But even this number cannot portray the growth realistically, as unregistered refugees have to be added to the already registered asylum seekers.
The demand for living space in Berlin is barely stoppable, even if housing offers are stagnating. In 2014, only 8.637 new dwellings were created, only almost a quarter of the new inhabitants arriving. In 2015, this figure is even expected to double, despite the already enormous growth of population.
Growing Economic Strength
Berlin is also becoming increasingly attractive as business location. With an economic growth of 2.2%, the Berlin economy has even grown stronger than the gross domestic product, which has only grown by 1.6%. In comparison with other regions in Germany, Berlin is on second place right behind Baden-Württemberg, which recorded an economic growth of 2.4%. Even Bavaria with 1.8% and Hamburg with 1.6% are behind the capital in the ranking. Who would have thought? Even the numbers of employees who are liable to pay social security contributions are increasing at a stronger rate compared to the national level. Between 2014 and 2015, the Berlin growth was 3.3%, compared to only 2.0% Germany-wide.
You are looking fo a lucrative investment opportunity on the Berlin property market, then do not hesitate to contact us today via telephone or mail.
Your Accord Estates GmbH Team