Condominiums in Berlin: scarce and expensive

Condominiums in Berlin: scarce and expensive


Residential
13.01.2021 Author/s: André Adami

Our annual studies on new-build condominiums show: Prices in Berlin's inner-city districts continue to grow undisturbed by corona. The project developers' target group is often capital investors. At the moment, however, they might need a little longer to rent them out.

For many years we have been analysing the markets for new-build condominiums for the class A cities. At the end of 2020, two studies were published for Berlin, one for the eastern and one for the western inner city districts. You can find information on our condominiums studies for Hamburg, Düsseldorf and Frankfurt/Main on the bulwiengesa website (German language only).

East Berlin: Focus remains on capital investors

The 12th study "New-build apartment projects in Berlin's eastern inner city districts" analyses current construction projects in the districts of Mitte, Friedrichshain and Prenzlauer Berg.

The current study from December 2020 again shows a significant increase in asking prices of around 18% to €8,370/sqm on average. As in the previous year, it is most expensive in the Mitte district - where the increase in purchase prices is 36 %. The cheapest project starts at a square metre price of €6,000, the most expensive at Tacheles is on offer for €13,800/sqm.

Contrast programme: The construction site at the former alternative Kunsthaus Tacheles in January 2019. According to the master plan by Herzog & de Meuron, luxurious flats and offices are being built.

In 2020, a high-rise building - the UPSIDE in Friedrichshain - and the premium project "Tacheles" are being marketed. This partly explains the high price increase. In addition, there is less and less supply and financing interest rates remain extremely low. By way of comparison, the Frankfurt condominiums study, published almost at the same time, shows an increase of "only" 4.6 % compared to the previous year.

The supply volume continues to decline with 16 projects and approx. 1,300 condominiums. The focus on capital investors remains - the median living space is 76 sqm, 4 sqm more than in 2019, which means that the market is also being supplied with many high-priced units for rent. Given a current stagnation in population, rentals could take a little longer.

West Berlin: hardly any more offers

The 10th bulwiengesa market study on "New-build apartment projects in the western inner-city districts of Berlin" was also published at the end of 2020. However, the developments in the districts considered - Charlottenburg, Kreuzberg, Schöneberg, Tiergarten and Wilmersdorf - are very different. While asking prices in Tiergarten are roughly stable, in Wilmersdorf they are rising very rapidly to an average level of over €11,000/sqm.

In general, however, the Corona pandemic does not seem to be affecting Berlin condominiums: Purchase prices in the aforementioned western inner city districts have risen by 16% to an average of 8,610 euros/sqm. Only one project offers flats for less than 6,000 euros per square metre. A considerable part of the price growth is due to the continuing rapid increase in land prices and the ever higher technical requirements for modern housing construction.

The supply has shrunk considerably, and the number of flats has fallen by around 50 % compared to the previous year. Only 25 construction projects with a total of 1,317 residential units could be examined in the current study. At the same time, the projects are becoming smaller and smaller - often gaps are built on, large areas are less and less available.

Demand from owner-occupiers and German capital investors is stable. Compared to previous years, however, significantly fewer foreign buyers are appearing, partly due to the Corona restrictions.

 

Note: The condominiums studies for Berlin-West and Berlin-East including project data sheets and 5-year comparison of the most important key figures (purchase prices, living space, construction volume and project sizes) can be purchased (German language only).

Contact person: André Adami, Head of Division Residential at bulwiengesa, adami [at] bulwiengesa.de