Berlin Mitte Skyline (credits: Dennis Gerbeckx)
Reports about Berlin’s flourishing property market are not shy in the last few months. It seems that the capital of Germany has finally morphed out of its sleeping beauty shell and climbed into the international limelight when the rest of Europe licks their wounds.
We hear of shiny, modern new property developments in the middle (Die Mitte) of Berlin with prices as high as 10,000 euros per square metre which is apparently more than double than only a few years ago.
These new developments have apparently been built over the last year or so and some are still under construction to be released by 2010. Names such as Oxford, Fellini and Fehrbelliner are thrown around, impressing us with their luxury and style.
Fellini is an Italian inspired complex, comprised of luxurious interior, first class fittings and roomy apartments. In total there are three floors made up by 1,2 and 3 bedroom apartments from 60 m2 up to 260 m2. Average prices range around 4,000 euros per square metres according to the price list.
While we were impressed with the sizes of apartments, townhouses, penthouses and more at the Fehrbelliner we couldn’t verify claims that a square metre in some of the Berlin Mitte projects were costing as high as 10,000 euros as reported by Reuter late last month.
Property figures have been consistently low in Germany over the last decade or so and Deutsche bank Analyst Tobias Just reported that average prices of a flat in Berlin were 2,620 euros per square metre at the end of 2007, compared to 3,700 euros in Munich, 4,780 euros in London and 5,352 euros in Paris.
A veteran Berlin property developer by name of Maik Uwe Hinkel says he could have sold each of the 17 flats in the upmarket and luxurious “Oxford Residence” three or four times over.
“This area is very much in demand. We have Spanish, Italian, Polish and French buyers as well as Germans,” Hinkel said.
But even with about 30 new developments in the Mitte area alone hitting the market all at once, he is cautious by his own estimation.
Perhaps the biggest development project of all in Berlin is the massive “Tacheles Quarter” in the â€œJohannisviertel”, an ambigious residential and commercial complex. It totals 80,000 square metres and will commence in 2009 by the Fundus Group, who also built the Berlin Adlon Hotel.
Despite the hype and the development that is currently happening in Berlin, some warning signs have surfaced when the Orco property group had to seize building on the Fehrbelliner complex in April this year due to swelling costs.
“Our idea was to build at the very top end of the market,” said Steinbauer, head of sales at Orco. He hopes construction will resume soon. The Fehrbelliner complex is supposed to feature 160 luxury apartments, a “wellness” area and child-minding services. It is expected to be completed by the spring of 2010.
At this stage, there mixed messages about the property market in Berlin. Prices are still good, but slowly on the rise and because of the uncertainty some investors might not feel comfortable to go the whole way.