Consistently Rising Demand for Residential Property

Berlin is considered a trendsetting metropolis not just in Germany, but across borders. This is clearly reflected in its population figures: the number of residents in the capital has been steadily increasing for years, thanks to immigration from both within Germany and abroad.
However, new housing construction has not kept pace with population growth, creating noticeable pressure on Berlin’s housing market. In high-demand areas especially, both rental and purchase prices have risen significantly. Frequent tenant changes and property renovations have further driven up real estate prices, even for existing properties.

---

Buying an Apartment in Berlin as an Investment – A Growing Trend

Berlin is not just worth a visit – more and more people are discovering its charm as a place to live and its potential as a real estate investment. Condominiums, in particular, are popular investment options. When rented out with a long-term profit strategy, apartments can serve as a strong retirement plan. There’s also the option of future self-use, offering rent-free living once the apartment is fully paid off.

When choosing and planning your investment property, it’s important to consider key factors to ensure steady income and long-term success.

Apartments are especially well-suited as an investment for average-income buyers, as the purchase costs are generally more manageable compared to multi-unit rental buildings. By purchasing a rented apartment, rental income can help cover financing costs from the outset.

---

Keep Additional Costs in Mind When Buying a Condominium

If you decide to buy a condominium as an investment, it's essential to look beyond the purchase price and expected rental income. Additional costs include:

• Real estate transfer tax in Berlin is 6% of the purchase price (as of 2016).

• Notary fees and land registry costs typically amount to up to 2% of the purchase price.

• Brokerage fees may apply: unless otherwise negotiated, agent commissions in Berlin are 7.14% incl. VAT.

• You may also incur financing arrangement fees – it’s best to clarify these in advance with the seller or advisor.

---

Is It Worth It? Calculate Expected Rental Income in Advance

To ensure your property investment pays off, you should focus primarily on the rental income potential. Ideally, determine the realistic net cold rent (excluding utilities) at the time of purchase. The easiest way is by comparing prices of similar apartments in the area and consulting the official Berlin rent index (Mietspiegel), published by the Senate Department. This rent index is scientifically based and widely respected by tenant associations.

Always ask to see the current rental contract or recent bank statements. Reviewing the tenant file can reveal any issues, such as maintenance problems, rent reductions, or disputes, helping you avoid unpleasant surprises down the road.

---

Future Outlook: Growth Continues, Though at a Slower Pace

Although Berlin rental prices have risen sharply in recent years, experts expect a slight market correction in the near future. Moderate increases in real estate prices are projected. Apartments in emerging districts — rather than traditional hotspots like Mitte or Friedrichshain-Kreuzberg — are expected to benefit the most. These forecasts are based on Berliners’ purchasing power compared to residents of other major German cities and on government efforts to increase new housing construction. A wider property selection may offer buyers greater flexibility and price options.

---

Update: Migration Pressures Intensify Housing Demand

According to the Postbank study “Wohnatlas 2016 – Living in the City”, Berlin's housing market will tighten significantly by 2030. Population is expected to increase by 4.74%, including refugee projections, while condominium prices are projected to rise by 14.49%. Berlin's city administration also forecasts population growth — a 7% increase in its medium scenario.

As a result, demand for both new and existing condominiums is expected to grow in parallel. Rising rents and persistently low interest rates present attractive return-on-investment prospects for well-selected condominiums.

---

Get in Touch!

Have you fallen in love with one of our investment properties or Berlin apartments? Would you like more information?
We are happy to advise you on which of our listings suit your needs — and assist you with financing options if needed.

Contact us to schedule a viewing or a personal consultation!