Berlin: Rental price increase at record height - housing shortage and high immigration drive prices up

Berlin: Rental price increase at record height - housing shortage and high immigration drive prices up

Berlin - Rents in Berlin have been rising continuously for years, but the increase has even accelerated in the past few months. According to real estate experts, Berlin is now one of the second most taxable cities in Germany in terms of offering. However, despite the downward trend, the purchase prices for real estate in Berlin remain at a high level, as the Association of German Pfandbrief Banks (VDP) shows in new figures.

In the second quarter, rents in Berlin rose by a whopping 9.5 percent compared to the same period last year, which is the greatest increase among the seven German metropolises. Nationwide the plus was 6.2 percent.

At the same time, real estate prices in Berlin fell by 3.6 percent in the year, which is not the slightest decline in any other big city. In Frankfurt, prices fell by more than nine percent and more than six percent in Munich and Hamburg. Jens Tolckmitt, General Manager of the VDP, explains that too few apartments have been built in Berlin for years compared to population growth. The vacancy rate in the city is very low. Compared to the first quarter, however, there was a slight decline in real estate prices in Berlin. About a fifth of the Berlin population lives in their own property, while the capital is considered a tenant capital.

The rental increase in Berlin is particularly strong because the offer rents recorded enormous growth in the first half of the year. According to Grandmakler Jones Lang Lasalle (JLL), the offer rents in Berlin were 17.50 euros per square meter in advertisements and thus in second place behind Munich (22.50 euros) and in front of Frankfurt and Stuttgart. Although offer rents do not yet represent final rental degrees, according to the Immowelt portal, Berlin has become the second most of Germany in terms of offer rents within a few months.

A reason for the rental increase is the strong immigration to Berlin. At the end of 2022, the capital had over 3.8 million inhabitants, more than ever since reunification. In addition, due to its location in northeastern Germany, Berlin recorded many war refugees from Ukraine. According to social and integration senator Katja Kipping, around 60,000 Ukraine refugees lived in Berlin in February.

Another problem is the lack of new living space. In 2022 alone, almost 77,800 people moved to Berlin, while only just over 17,000 apartments were completed. However, the goal of the Senate is 20,000 apartments per year.

Although Berlin is not the only city with high rents, the inventory rents remain comparatively cheap compared to cities such as Munich, Hamburg, London or Paris, such as Jutta Kreuzinger, spokeswoman for the real estate and Pfandbriefbank Berlin Hyp. According to data from the Berlin-Brandenburg-based apartment company, the local comparative rent in Munich was 85 percent higher in 2022 than in Berlin.

The rising prices, however, endanger the city's social mix. Berlin had a special attraction for people with low incomes and alternative life plans for decades with its cheap rents. Ulrike Hamann, managing director of the Berlin tenant association, emphasizes that Berlin was lucky enough to be a socially mixed city. Due to its division history, former outskirts have been inner city areas since 1989, which are still equipped with social housing. However, the social mix and the alternative image of Berlin led to the city has also become internationally attractive.

However, people find less and less affordable living space in Berlin. Every year there are more social housing from the bond than new ones are added. Political decisions also have an impact on the sale of a large part of the state -owned apartments in the 2000s. As a result, large listed companies such as Vonovia/Deutsche Wohnen are active on the Berlin housing market, which leads to a relatively limited steering of the common good -oriented sector, criticizes Hamann from the tenant association.

The question is whether Berlin will reach a similar price level as Munich, London or Paris in the near future. Jutta Kreuzinger from the Berlin Hyp is optimistic and does not believe that Berlin will see a comparable development. It emphasizes that rents in major German cities are limited by legal measures and tenant protection is guaranteed, especially in Berlin by designating milieu protection areas. A prerequisite for this, however, is a much stronger new building.

Ulrike Hamann from the tenant association looks at the development more critically. If it is not clearly counter -controlled and massively invested in a common good sector in which the permanently favorable living space is preserved, Berlin could count on similar segregation tendencies as in Paris or London in the coming decades.