Berlin has its fair share of palaces (San Souci and Charlottenburg) and Museums (the Pergamon Museum) and historical associations (the rebuilt Reichstag and Spandau, for instance, where Albert Speer was incarcerated) and it’s now enjoying another renaissance as a lively cultural centre instead of the cold war bastion of freedom. However, to point out that Berlin property is cheaper than that in Paris or Rome might prompt the thought that it doesn’t compare so well in other ways.
With its waterways and open spaces, though, it does offer an environment that competes very well with over-priced London and, indeed, some Londoners are beginning to seriously consider Berlin as the first rung of their property ladder. British food favourites can be sourced from a number of places around the city and gym and swimming facilities compare favourably with London’s. As the Insite consultancy says, you can buy an apartment in Berlin for the price of a garage in London or Dublin.
Berlin’s property prices are lower than in the main cities in the west of the country such as Frankfurt and Munich. However, there are potential problems in the prevalence of sitting tenants and controlled rents, and the fact that, while Berlin is once again Germany’s capital city, it’s likely development as a financial centre is questionable. Demographically, the city could be facing an absolute decline but general trends and capital city status will probably mean a steady increase in one person households. The city’s development is being hampered by the local authority’s huge debts.
Prices in Charlottenburg, Wilmersdorf and Schoneburg are rising and the districts of Kreuzberg and Mitte (close by the site of Checkpoint Charlie) are gaining favour as more central locations. Also in the former Russian sector of the city, Pankow and Friedrichshain are becoming popular. For UK investors prices can seem very cheap and the return on investment in terms of rental income can be over 8% a year. A large number of properties in former East Berlin require substantial renovation. The quality mark to look out for in this context is TUV. Generally, refurbishment is more common than wholesale rebuilding especially in the case of ‘character’ buildings that survived allied bombing in World War II.
The AIM listed property company Dawnay Day Treveria plc which has Berlin properties provides an alternative to direct investment.
The Expatica website provides excellent advice and commentary on the state of the property market.
Talking of Zeitgeist, Hegel’s career as a philosopher culminated at the university in Berlin in the 1820s.