A leading real-estate agent reveals that Berlin’s lettings market which is already in full swing is expected to climb up further due to the rise in population. Property investors from abroad are looking at banking on the current situation in the lettings market, adds the agent. Despite the rise in population, the lettings market has not been able to keep up with the property demand in Berlin. Statistics reveal that Berlin’s population picked up by nearly 100,000 in the last two years while only a meager 10,000 new apartments have been raised to accommodate the demand.
Supply shortage sparks from population rise
Berlin, Germany’s biggest city, boasts of a population that is in excess of 3.5 million. The Berlin Federal Statistical Office claims that the resident numbers rose by nearly 47,800 annually, by 2013 end. The Urban developments Concept Berlin 2030 forecasts that the population will soon climb up by another 250,000. Real-estate analysts have been concerned about how efficiently the current supply can suffice the demand in the lettings market.
Knight Knox International claims that the home-ownership rates in Berlin stand at 17 percent and a majority of residents rely on renting properties. Berlin-Brandenburg Housing Association board-member, Maren Kern, says that the rise in demand in the renting sector can only be countered by new constructions.
Berlin’s property market garners attention of overseas investors
A leading property agent says that many inquiries have been coming in from various investors about Berlin-based properties in the recent past. The investor appetite stretches to as far as Kuwait, the UK or Macau. While the inrush cannot be attributed to any country or region specifically, it is predominantly wide spread and genuine, claims the agent. Potential investors are typically on the lookout for properties with impressive yields and ROI, explains the agent.
Berlin outshines other European real-estate markets
In wake of the growing investor interest, property prices in Berlin have shot up by nearly 17 percent during the past 12 months. Furthermore, property prices have shown an appreciable rise of 31 percent during the five year period as of July 2013. The asking price of one bedroom apartments alone have increased by 53 percent in the past three years. The low rental rates is another highlight of Berlin’s emerging property market. Berlin’s rental charges as of 2013 stood at €7.90 per square meter, while they were slightly steeper in Hamburg and Munich with €10.00 and €12.50 respectively.
Despite showing impressive leaps in apartment prices, Berlin still doesn’t fare as well as other European property markets price-wise. Berlin’s apartment pricing standards rank low when compared to Paris or London. Apartments are sold at average rates of €2,000 per square meter in Berlin while the same would go at thrice the value in Paris or over three-quarters more in London.
In fact, PWC claims that the low prices in the Berlin property market has put it in the top spot for investors who are looking at purchasing residential assets, according to its Emerging Real-Estate Trends 2013 report. Berlin’s outstanding performance in the investor market can be also be accounted to the fact that it has ample growth opportunities.