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Berlin Rental Market Booms as Population Swells

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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.

With homeownership at just 17%, renting is the norm in Berlin, meaning that the majority of these new residents are set to add to the already, incredibly 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% 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 ImmoWelt.de, asking prices for one bedroom flats have risen 53% in three years, while residential property prices have jumped 17% 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, where they stood at €10.00 and €12.50 respectively, outlining the opportunities for growth in Berlin.

Berlin’s emergence as an area for investment is a result of it being recognised as one of the world’s fastest growing cities.

This new-found status can be seen in the city’s surging tourism figures. Berlin hosted over 26 million overnight guests last year, according to its tourism office, making it not only Europe’s third most popular city for real-estate investment, but also Europe’s number three city destination.

Leaders in worldwide property investments, Knight Knox International, were quick to respond to these changing market trends in Berlin, launching a host of developments in Berlin at the start of 2014.

One of these developments is situated in the artistic region of Kaiserdamm, while two more developments are located in the district of Mitte – a popular destination for new residents to the city, which sees annual population increases of 3%.

The developments include; Mitte Living which is set to comprise of 128 residential apartments upon completion, Shorhnhorststrasse, which is set to comprise of 118 high-end one, two and three bedroom apartments, and Kaiserdamm, which will contain 31 residential units, two commercial units and 20 underground parking spaces.

The Shorhnhorststrasse luxury apartments are available from £305,663; Mitte Living apartments are available from £187,065 and Kaiserdamm apartments from £149,990.

For more information please contact a Knight Knox International property consultant on 0161 772 1370.

Les Calvert is the owner and CEO of many internet property and travel related websites including this overseaspropertymall.comand he regularly writes news and articles for his websites, trade magazines and newspapers.