Acquisition of real estate in Germany over the past few years has become a profitable investment. Prices and rental rates for residential real estate here annually increase from 2 to 6%, depending on the primary or secondary nature of the housing stock, federal land. Real estate in Berlin is attractive not only because this city is the second most populous in Europe, the capital of Germany, a major economic and financial center. Berlin is a city of science and culture, tourism, universities and innovative technologies. In addition, there are all conditions for a comfortable stay.
Berlin real estate market
The real estate market in Berlin is characterized by the same features as in Germany as a whole. So, for example, the main feature of German real estate is price stability, without upward and downward jumps. Renting out real estate brings low dividends (from 4 to 7% per year), but it carries minimal risk and provides a moderate but stable income.
At the same time, one should not forget that Berlin is a special city. Here, along with general German tendencies, there are nuances inherent only to him. These features should be known and taken into account when considering options for buying an apartment in Berlin.
When assessing the real estate market in the German capital, first of all, you should focus on prices. It should be noted right away that this is one of the most attractive factors.
A simple comparison of Berlin real estate prices with prices in London, Paris, Rome and other European capitals shows that the cost of one square meter of housing is half that here - about 4,000 euros.
Among the largest cities in Germany, prices for residential real estate in Berlin are the sixth most expensive, behind Munich, Frankfurt am Main, Hamburg, Stuttgart and Dusseldorf.
This fact, even taking into account the fact that in 2021 real estate prices in Berlin rose by an average of 9.6% (this is the highest in Germany), shows that there is a certain margin for the further development of the real estate market. The lag in prices will persist for some time - at least for the next two years, which opens up opportunities for profitable investments.
Berlin provides a choice: real estate from a developer, secondary housing, apartments and houses for every taste and financial ability. Minimum prices start at 800 euros. In elite houses in the central districts of the city and new buildings - from 3000 to 7000 euros per square meter.
Another feature of the Berlin real estate market is the large differences in the quality of housing and prices for it in the former sectors of West and East Berlin.
East Berlin, which bears the imprint of the socialist heritage of the GDR, offers real estate at lower prices than in the western part of the city. You can still buy cheap housing here (from 800 to 1500 euros per square meter), but it should be borne in mind that its quality and convenience will be much inferior to apartments in West Berlin.
The pricing policy is also influenced by the area in which the property is located (there are prestigious and not so prestigious ones), and the degree of accessibility of urban transport infrastructure. For example, the real estate market is developing most actively in the area of the ring of the Berlin city train (Ring Bahn).
A striking feature of the real estate market in Berlin is the presence of a large number of housing, which was built in the Kaiser's times. The demand for such houses is great: despite their age, they are located in the central districts of the city, restored, all communications in them have been replaced with modern ones.
Apartments in such houses have thick walls, high ceilings, are comfortable for living, and the cost of secondary housing here can reach 2000 to 3000 euros per square meter.
Another difference in Berlin is that there is a constant population growth, especially in the Pankow and Lichtenberg districts, but its purchasing power is inferior to other megacities in Germany.
85% of Berliners live in rented housing. In the past few years, there has been a tendency to reduce the part of the housing stock that was previously rented out. We are talking about thousands of apartments: investors, buying out cheaper housing, invest in it, convert it into luxury apartments and sell it to wealthy foreigners.
This, as well as the increase in rental prices (2021 - 11.6 euros, 2021 - 12 euros, 2021 - 12.3 euros per square meter), makes Berliners look for more affordable housing on the outskirts of the city and send protests to the city administration.
To reduce the shortage of housing, especially economy class, in Berlin, it is necessary to commission ten thousand apartments annually; in 2021, construction permits were issued for only 4,420 objects.
One of the reasons for the impossibility to build more is the lack of land. This also led to a rise in land prices. So, in 2021, the average price for a land plot was 480 euros per square meter, in 2021 it rose to 650 euros.
Interesting fact. Berlin does not have a single center, which is customary for most capitals of the world. After the end of World War II and the division of Berlin into two zones, each of them had its own center. In the East, the old city district Berlin-Mitte became the center, in the West - the suburb of Charlottenburg. Today, a new center of Berlin is being formed - in the area of Potsdamer Platz.
The main actors in the Berlin real estate market are:
- German firms that invest in real estate;
- German citizens who wish to keep their savings and receive some kind of stable income;
- foreign investors; citizens of the Russian Federation make up 5% of them.
German banks willingly provide loans to both German citizens and foreigners: mortgage rates are among the lowest in Europe - from 0.8 to 2% for German citizens and 3-5% - for foreign citizens.
Administrative divisions of Berlin
Berlin is equal in status to a federal state, it covers an area of 893 sq. km. The administrative-territorial structure of the city includes 12 districts (Bezirk), which, in turn, are divided into 95 districts (Ortsteile).
Average property prices in Berlin (2021)
| Administrative District | District | Purchase apartments, euro / m² | Rent apartments, euro / m² |
|---|---|---|---|
| Mitte | Mitte | 6757 | 15,75 |
| Charlottenburg Wilmersdorf | Charlottenburg | 4474 | 12,71 |
| Steglitz-Zehlendorf | Wilmersdorf Grunewald Dahlem Zehlendorf Steglitz | 5207 6033 4565 5188 3596 | 12,41 13,90 12,65 10,56 10,68 |
| Pankov | Prenzlauer Berg Pankov | 5006 4146 | 13,13 10,39 |
| Friedrichshain Kreuzberg | Friedrichshain Kreuzberg | 4215 4418 | 13,86 12,59 |
| Lichtenberg | Lichtenberg | 4015 | 10,29 |
| Tempelhof-Schöneberg | Tempelhof Schoneberg | 3990 4795 | 10,22 12,11 |
| Treptow-Köpen | Köpenick | 3845 | 8,92-11,34 |
| Reinickendorf | Tegel | 3344 | 10,33 |
| Marzahn-Hellersdorf | Marzahn | 3316 | 8,01 |
| Spandau | Spandau | 2744 | 8,60 |
| Neukölln | Neukölln | 3558 | 11,25 |
Mitte - "Heart of Berlin"
The Mitte district is located in the very center of Berlin on both banks of the Spree. It is at the same time the center of the city's cultural, business, political and tourist life. During the Second World War, the district was almost completely destroyed, the reconstruction was completed in the 1990s: Friedrichstrasse, Hack Palaces, Reich Chancellery, Alexanderplatz.
The area is replete with sights (Brandenburg Gate, Galeries Lafayette, Museum Island and others), restaurants, cabaret, concert halls. Government offices are also located here.
Real estate prices in the area are the highest in Berlin; the real estate of the secondary housing stock is especially expensive here. The size of the rates varies depending on the area and on average ranges from 4800 to 8500 euros per sq.m. One-room apartment (38 sq.m.) can cost from 200 to 300 thousand euros.
Renting a living space will cost from 14-29 euros per square meter per month and more. So, the cost of renting a new one-room apartment excluding utilities (18 sq.m) in the center can reach 522 euros per month, a new townhouse (100 sq. m.) - 1850 euros.
Friedrichshain-Kreuzberg
Since the mid-1960s. the Kreuzberg district (Friedrichshain-Kreuzberg) has become the capital of youth subcultural movements (hippies, skinheads, punks, etc.). Since then, many young people and students have been living here. In 2001, the eastern region of Friedrichshain was annexed to the district.
Today it has the highest population density in Berlin - three times the city average. It is here that most of the nightclubs, bars and simply eateries, hostels are concentrated.
70% of all new buildings (more than 4,000 apartments) in the district will be built in Friedrichshain. The cost of an apartment in new buildings is from 3 to 6 thousand euros per sq.m., in the secondary market - from 2500 to 6500 euros. So, a 2-room apartment (55.5 sq.m.) built in 1920 costs 292 thousand euros. Rent is from 12 to 14 euros per sq.m. per month.
Pankow - the place where Berlin bohemians live
Pankow (Pankow) ranks second among the districts of Berlin in terms of area and the first in terms of population - 400 thousand inhabitants, mostly wealthy citizens of Germany, ethnic Germans. The district is distinguished by a large number of squares, parks, ponds, and a good ecological situation. Earlier, the leaders of the GDR lived in this area. Most of the buildings were built in the first half of the twentieth century, including more than 300 cultural monuments.
Real estate and rental prices are high, especially in the Prenzlauer Berg area: in new buildings - from 3 to 6 thousand euros per square meter, in old houses - from 2500 to 4500. The area has the potential of vacant plots for construction. The rental price varies from 10 to 13.30 euros per sq.m. In the Pankow district, a one-room apartment (36 sq.m.) will cost 374 euros per month, in Prenzlauer-Berg the same apartment will cost 482 euros.
Charlottenburg-Wilmersdorf - elite center
Charlottenburg-Wilmersdorf - one of the most fashionable areas, ranks fourth in terms of population. Many boutiques, restaurants, hotels, office buildings are concentrated here. In the district there are Charlottenburg Palace, the Olympic Stadium, the Berlin Opera.
The most prestigious area is Grunewald. Elite houses are located on the shores of the Wannsee and Nicholassee lakes, in the forest. The area of apartments exceeds the average for the city.
The building is dense. New buildings are being carried out only in the premium segment.
Real estate prices are among the highest in Berlin: for new apartments they start at 5,000 euros per sq.m. The price of a modest two-room villa with a pool built in 2021 (46 sqm) in the Wilmersdorf area is 3544 euros per sqm, in Grunewald - from 6040 euros and more.
Secondary housing stock - from 4500 to 8500 euros per sq.m. Rental prices, excluding utility bills, range from 12.41 to 13.90 euros per sq.m.
Spandau
Spandau is the least populated district of Berlin with the lowest real estate prices. The district is located away from transport communications. Since 2021, there has been a tendency for prices to rise by 27%. So, today new apartments are sold at prices ranging from 3000 to 6000 euros per square meter (with a five-year quality guarantee).
Old apartments - from 2500 to 4500 euros per sq.m.
Renting a one-room apartment (37 sq.m.) built in 1900 will cost 86.50 euros per month, similar to an apartment built in 1954 - 89 euros.
The area is famous for its parks and lakes, ideal conditions for outdoor recreation. Every year thousands of tourists and Berliners gather here for the Christmas market.
Among the sights, the twelve-sided Citadel of the 13th-16th centuries occupies a special place. and the Old Town. There is also a prison for former Nazis Spandau.
Steglitz-Zehlendorf
The Steglitz-Zehlendorf district is located in the southwest of the city and is one of the most prestigious. Abounds in parks, forests, lakes. It is here that villas, mansions and 5-room houses in Berlin are located.
Lake Grosse Wansee is famous for its yachting regattas and Strandbad Beach, where any Berliner can relax.
In Dahlem there are the Free University of Berlin, the botanical garden, the 46-meter Bierpinsel tower. There are few construction projects - 9 (for 675 apartments). The reason is the lack of free land for construction.
New apartments are sold at a price of 4500 euros per sq. M, secondary housing stock - from 3 thousand to 8500 per sq. M.
Property prices are higher in the Zehlendorf area. So, an elite villa (470 sq. M.) Built in 2001 will cost 2 million 495 thousand euros, and a villa built in 1922 (310 sq. M.) - 1 million 249 thousand.
Housing rent here ranges from 10.50 to 13 euros per sq.m.
Tempelhof-Schoneberg
Tempelhof-Schoneberg is the second most populous district located in the south of Berlin. This is a typical European area: not far from the center, the real estate market can satisfy all tastes: old buildings, luxury houses, townhouses, skyscrapers. Accordingly, the prices for new housing stock are 3000-6000 euros per sq.m. Secondary housing stock is cheaper: from 2500 to 4500 euros per sq.m.
The rental price increases annually: from 8.50 euros in 2021 to 12.20 euros per sq. meter in 2021
The cultural life is rich - concert venues, shopping and entertainment centers, a zoo, there are also many shops, bars, nightclubs.
There is a large percentage of student youth in the district. The level of safety and tolerance is evidenced by the fact that this is the most "homosexual" district of Berlin. It is here that most of the representatives of non-traditional sexuality live, who moved to Germany from the USA, Anlia, Italy and other countries.
The most actively developed area is Schöneberg.
Neukölln - Turkish Berlin
Neukolln is Berlin's most multicultural district and has a reputation for being the most crime-ridden district in the city. Approximately one third of the population are immigrants from Turkey, Arab countries, Poland, Romania. It is also home to many young people and students.
Economy class property prices here used to be among the lowest in Berlin. Since 2021, the situation has changed and the rate of growth in prices and rents for housing exceeded 17%, outstripping the rest of the districts of Berlin.
Today, prices for new apartments here have reached the level of 3000–4500 euros per square meter, for old apartments - from 2000 to 4000 euros.
House prices - from 1200 euros per sq.m. Renting a private 5-room house (130 sqm) built in 2021 will cost 1650 euros per month.
Construction is underway in the district.
Neukölln hardly suffered from the bombing during the Second World War, thanks to which a large number of buildings from the late 18th-19th centuries have survived.
Treptow-Köpenick
District (Treptow-Kopenick) - the largest in Berlin. The population density is the smallest in the city. Most of the territory of this peripheral district is occupied by forests, parks (the most famous of which is Treptover), lakes and rivers.
Some distance from the center also has positive features: fresh air, favorable environmental conditions. This made the district a favorite vacation spot for Berliners.
Among the sights, we can mention the sculptures Molecule Man (symbol of the unification of Germany), a monument to the Soviet soldier-liberator.
In the Köpenick area there is a baroque palace, a town hall, a huge number of cafes, pubs, restaurants.
Real estate prices for secondary housing stock do not differ much from other districts - from 3,000 to 6,500 euros per sq.m. For comfortable new apartments (Köpenick) - from 4000 to 8500 euros.
Of the peripheral districts, it is here that the largest new buildings in Berlin are: 38 projects for 5700 apartments. Rental prices are still available - from 8.92 to 11.34 euros per sq.m.
Marzahn-Hellersdorf
Marzahn-Hellersdorf is not very popular with tourists, although there are Biesdorf Palace Park and Marzahn Park. This is a typical residential area with typical panel houses, which were built in the era of the GDR.
The district is often called the most Russian-speaking: in addition to the former citizens of the GDR who studied Russian at school, many immigrants from the CIS live here.
The modernization of the housing stock in Marzahn began in the 1990s.Secondary housing stock is cheaper here - from 2,000 to 3,000 euros per sq.m., new buildings are more expensive - from 2,500 to 4,000 euros.
The rent is the most affordable in Berlin, although in 2021 it increased by 10.6%: 8.50-8.60 euros per sq. M.
Buying a residential building (150 sq. M) built in 1982 will cost 295 thousand euros.
Lichtenberg - "Berlin in miniature"
Berlin's eastern district Lichtenberg (near Alexanderplatz) is the fastest growing area in the city. Almost half of the district's population is from the CIS countries.
The Okrug occupies a leading place in the number of new buildings - there are 2,920 apartments per 100 thousand inhabitants (in the city as a whole - 890).
The district is a small model of Berlin. There is a little bit of everything here: business districts, supermarkets, restaurants, cafes, pubs, Friedrichsfelde Zoo, an old castle, the Berlin-Karlhorst War History Museum.
Accommodation prices are similar to those in Marzahn-Hellersdorf. Monthly accommodation in a three-storey house (154 sq. M.) Built in 2021 will cost 1498 euros. The rent for residential real estate in the district averages from 10 to 12 euros per sq.m. per month.
Reinikkendorf - picnic in the port
The peripheral district Reinickendorf is located in the northwestern part of Berlin. Most of the district is occupied by an industrial zone, forests and lakes. This circumstance affects real estate prices in the district, they are less high compared to other districts of Berlin: from 3000 euros per square meter in new buildings and 2500–4500 - in the old housing stock.
The pace of construction is low: there is not enough free land for the construction of housing.
Of the sights, the Tegel Palace and the Tegel Port culture and entertainment center should be mentioned. Several residential complexes are located on the shores of the lakes and on Humboldt Island. The cost of an apartment here averages about 3400 thousand euros per sq.m., rent - up to 10.35 euros per sq.m. It should be noted that these indicators tend to increase.
Commercial real estate: risks and features
Berlin (like Germany in general) attracts foreign investors by factors such as:
- stability and risk minimization - for decades the German economy has been developing without crises, collapses in real estate prices;
- order and adherence to the laws - all mechanisms related to the purchase, paperwork, subsequent leasing are fine-tuned to automatism, there is no discrimination or restrictions for foreign investors;
- stable growth in real estate prices (it is important to seize the moment before prices have reached their peak);
- availability - it is possible to find an object for investment, with a budget of up to 100 thousand euros, low interest rates on loans. The average bill for Russian investors is 200-300 thousand euros per apartment.
Statistics show that foreign citizens most often invest in:
- offices - due to the increase in rent, the profitability decreased to 3-4% per year;
- retail real estate - brings up to 3-4% of income per year, but there is a downward trend in profitability;
- warehouse premises - up to 5-6% per annum;
- housing for subsequent rental. The rise in housing prices has also caused an increase in rental rates, in connection with which the profitability ranges from 5 to 7% of the profit per year.
Thus, the most profitable for investment commercial real estate in Berlin today is represented by apartment buildings: I mean the purchase of the whole house as a whole, apartments on a separate floor or a separate entrance.
Current trends in the real estate market in Berlin indicate a continued growth in rental rates: an increase in migration processes, a shortage of housing and free space for construction and other factors will not contribute to their decline.
German housing stock, including secondary ones, is distinguished by high standards and quality. Long-term lease agreements (5 years or more) allow predicting income from 5 to 7% per year.
Another type of investment, more profitable, but also with greater risk, is the purchase of plots for the construction of new houses; with the rise in the cost of land, the profitability of such projects decreased from 18 to 12% per year.
The middle option is when the investor, having taken out a loan, after the completion of the construction of housing (especially small apartments of 20-30 sq. M.) Does not sell it. In this case, the house remains with the investor, who rents out the apartments. The loan is refinanced at a lower rate and the rent covers all loan payments.
Let's summarize
The acquisition by citizens of the CIS of real estate in Berlin, taking into account the current market situation, is a promising capital investment. The economic feasibility is beyond doubt: prices in Berlin have not yet caught up with other European capitals, the German economy is developing steadily, and a policy of favoring foreign investors from the government and banks is in effect.
An apartment building will bring a stable guaranteed income of 5-7% per annum in the absence of risks, the sale of cottages - up to 12% with minimal risk.
In addition to the economic component, the ownership of Berlin real estate has additional advantages: living in Berlin is comfortable and pleasant, and it is easier for a real estate owner to obtain a multiple-entry visa to Germany or a residence permit.
Real estate prices in Berlin depend on the prestige of the areas. The most attractive are Mitte, Charlottenburg, Grunewald, Zelendorf. The price level is influenced by the proximity to the center and transport communications, the time of housing construction: higher prices for buildings that were built before the 1920s. and after 2021
