Overtaking Munich, London and Paris, Berlin is ranked “first place in Europe for investors” in PwC’s latest research. National and international media have focused on the city’s real estate and according to FOCUS online, “Berlin has the hottest property market in Europe.”
Whether you are a professional investment company or a private individual, Berlin not only offers you an opportunity to grow your investment, but also provides many other business opportunities and a high quality of life in one of the most vibrant cities in Europe.
In the last few years, the purchasing and rental market in Berlin has expanded faster than in any other city in Germany, The price per square meter for apartments has increased rapidly since 2008 and this trend is continuing.
Key reasons for this trend:
1. The growing number of residents has driven up property prices
Berlin is the most dynamic state in Germany. Since 2005, the city has had the highest GDP per capita growth rate in Germany. Every year, more than 40,000 young talents move to Berlin. It is predicted that by the end of 2030, Berlin’s population will have increased by 15%. Housing shortages have caused a continuous increase in property prices. Since 2008, the price per square meter in Berlin has on average increased by 14% every year and in the city center, prices have increased by over 30%. Rents across Berlin also rose by up to 53% between 2008 and 2014. The demand for apartments will push the price even higher in the coming years.
2. Price advantage
In comparison to many other global cities in or outside Germany, property in Berlin is competitively priced. The average price per square meter is, for example, a third of the price in Paris and a sixth of that in London.
3. Strong economic development has attracted many businesses
Berlin has become an incubator city for global start-ups. In addition to well-established companies such as Bayer, ThyssenKrupp, Mercedes-Benz, Fujitsu, and Amazon, many more companies from a wide range of sectors have made Berlin their base. These include e-commerce and biotechnology, as well as cultural, media and creative industries. The demand for commercial and offices space has increased dramatically.
4. Interest rates for financing are at a historical low
5. Berlin is the new star of the international property market and this has been acknowledged by many financial institutions worldwide. A growing number of international investors and funds are active in the market. The demand for projects has encouraged new areas of development and this has had a direct impact on prices.
According to the Berlin Independent Evaluation Association’s 2014 annual report, most property transactions are in the center of the city. Individual purchases accounted for 78% of all transactions.
Berlin - an up-and-coming city with huge potential!
Competitive advantages for overseas buyers: