Berlin real estate: Into 2021 with pressure
The Berlin real estate market emerges unscathed from the Corona year and begins 2021 with significant growth rates. The number of properties on offer is also slowly increasing for the first time in years.
In the past 12 months, about 35,000 Existing properties were advertised on the relevant real estate platforms. As of 22.01.2021, the median asking price we have assessed is around 5,000 EUR/m². This means that the offer prices have developed by about 6.10 % compared to the same period a year ago.
For new construction projects, the 12-month median list price is around 6,540 EUR/m². In this period, about 6,780 properties were brought to the market from a wide range of projects.
Rent cap + Corona: supply on a downward slide
Rental offers in Berlin, measured from October 2019 to October 2020, are only around 22 percent of the previous year's volume. This is based on the cumulative offers of the real estate platforms Immobilienscout24, Immowelt and Immonet. After a typical New Year's peak in January 2020, listings collapsed dramatically with the introduction of the rent cap on February 23. In the first half of 2020, the volume of rental offers initially stabilized at around 50 percent of the previous year's supply. In October 2020, it reached a historic low. It is likely that the rent cap effects are catalyzed by the Corona pandemic. Year-over-year rent growth, as of October, is about 3.50 %. It is noteworthy that prior to the introduction of the rent cap, landlords were showing price restraint in all rental segments. As a result, asking rents rose only moderately throughout most of the city in 2019. Measured across all real estate platforms, the median asking rent in the current quarter is 11.55 EUR/m².
Berlin property market at a glance
The calculation of prices is based on the housing offers of the past three months. We determine the median offer price on a continuous basis for all types of apartments.
Price development in Berlin since 2010
For more than 10 years now, property prices in Berlin have been rising almost linearly. In 2010, the median offer price for Berlin real estate was around 1,550 EUR/m². As of 22.01.2021 it is at 5,000 EUR/m² for portfolio properties until the year of construction 2015.
Development of offered rents in the portfolio segment since 2013
Since 2010, we have also been recording rental offers in Berlin. Two trends can be observed overall. The rental segment of 5 - 8 EUR/m² has been getting smaller and smaller with a declining overall volume for years, while the rental segment above 14 EUR/m² is taking up more and more space. The introduction of the rent cap and Corona have accelerated the development.
Since the end of 2018 at the latest, a significant slowing of the rental trend has been observed.
Development of rental offers in the new construction segment
Approximately three-quarters of the new building segment in Berlin is reserved for the rental segment from 14 EUR/m². All offers that are declared as new buildings in the stock exchanges are analysed. This includes some renovated old buildings.
Housing stock in Berlin
At the end of 2018 there were almost 327,000 residential buildings in Berlin with about 1.95 million apartments, the majority of them in multi-storey buildings with 3 or more units. About 1.45 million apartments in Berlin are rented, status 2018. Around 337,000 units, including apartments in detached and semi-detached houses, are used by the owners themselves.
10-year index of purchase prices and rents
Looking at the city, the following development of the median supply prices in the portfolio segment and in new construction over the 10-year period is given:
Portfolio (stock) apartments and new buildings
In Berlin, in the past 12 months about 35,000 existing apartments have been advertised. The median is currently about 5,000 EUR/m². The price correction compared to the same period last year is thus approx. 6.10 %. In the new building segment the median for all locations and apartment types is currently about 6,540 EUR/m². There were approximately 5,440 properties on offer in the period of one year. New building projects are on average priced at 7.10 % higher than a year ago.
Evolution of price segments
We break down the supply market into four price segments for our analysis. It becomes apparent that for years, parallel to the price increase, there has been a reduction in the number of offers and a shift from the lower price segment to the two middle main segments. In the course of the restrictive rental policy, a slowdown of the trend can be observed in 2020.
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