Latest Updates on Berlin’s Real Estate Market

1. Decline in Property Prices: In 2023, apartment prices in Berlin dropped by 10.5% year-on-year, while house prices fell by 12.5%. The number of transactions decreased by one-third compared to 2022, reflecting reduced demand.
2. Market Stabilization: By 2024, the market began stabilizing. Asking prices remained largely unchanged, and rental rates increased by 5.9% annually, showing signs of recovery, particularly in certain city districts.
3. Reduced Construction Activity: In 2023, only 294,400 apartments were built across Germany, well below the target of 400,000. In Berlin, construction is hindered by high costs and limited availability of land.
4. Impact of Immigration: Berlin’s population grew by 0.7% in 2023, adding pressure to the housing market. High demand for rentals is exacerbated by a lack of new supply.
5. Investment Activity: In 2024, investment interest began to rebound. Major transactions returned, but investors remain cautious, especially regarding office spaces.
6. Rising Rental Rates: Average rental prices in Berlin increased by 18.3% year-on-year, reaching €13.60 per m². The premium segment saw an 8.7% rise, while the budget segment grew by 4.9%.
7. Changes in Supply: The number of properties for sale surpassed rental listings for the first time, as private landlords increasingly prefer short-term rentals.
8. Government Initiatives: The Berlin Senate introduced measures to streamline planning and approval processes for new construction projects. Efforts are being made to accelerate housing development and meet rising demand.
9. Forecasts: Experts predict rental rates will continue to rise, while property prices are expected to stabilize. Key factors influencing the market include migration, limited supply, and government programs.

Berlin’s real estate market is in a phase of recovery. Falling prices, rising rents, and new government measures are shaping the outlook for the coming years.