Germany Property News

Berlin rental market about to boom?

Berlin rental market about to boom?
A report this month suggested that Germany is increasingly becoming a nation of buyers rather than renters, but new figures predict its capital is about to enter a rental boom.

50,000 new residents moved to Berlin last year, and with over 200,000 more young professionals set to join this burgeoning populace by 2030, this boom is set to trigger surging growth within the city’s rental market, predicts Knight Knox.

Indeed, homeownership is just 17 per cent in Berlin, meaning that the majority of these new residents are set to add to the already high number of renters in the city.

The potential of this surge was recognised by investors last year, as Berlin became the third most active European real estate market between Q1 and Q3 2013, receiving investment of over ?4 billion.

Berlin has also toppled Munich as Germany’s most attractive area for investment. Last year, 96,000 residential units were sold within the historic city, accounting for 44 per cent of all real-estate transactions in the German property market.

This surge in real-estate investment has facilitated growth within Berlin’s wider economy. The start of 2014 saw the economic index of the Berlin-Brandenburg Chamber of Industry and Commerce reach its highest level since 2007, while Oxford Economics predicts that this growth is not set to slow any time soon, forecasting growth of 1.4% throughout the rest of the year.

As investor interest compounds, prices are inevitably rising in the Berlin market. According to, asking prices for one bedroom flats have risen 53% in three years, while residential property prices have jumped 17 per cent in the last 12 months and 31% in the last five years, ending July 2013.

However, this has not served to dampen investor appetite as prices for apartments in Berlin still remain relatively low, selling at an average of ?2,000 per sq. metre, a third less than the existing rate in Paris and less than a quarter of the price in London.

These low prices have seen Berlin ranked as the number one choice for residential investment in the “Emerging Trends in Real Estate 2013” survey by PWC, because of the opportunities for growth within the market.

Attractively, rents also remain relatively low, allowing for opportunities of growth in the rental market. At the end of 2013, the average rent in Berlin stood at ?7.90 per sq. m, lower than rents in Hamburg and Munich.

The investment experts at Knight Knox International are now responding to these changing market trends in Berlin, launching a host of developments at the start of 2014 from the artistic region of Kaiserdamm to the district of Mitte.