June 06, 2019
The bustling city of Berlin has been named as the place that has the fastest rising property prices. But what does this mean for those looking to buy a property there? Well, despite the increase in prices, it may not be as bad as it sounds. In Berlin, property prices are still amongst some of the lowest in the whole of Europe. In fact, a flat in Berlin would fetch about a third of the price as a like-for-like property in London.
Berlin’s property prices were expected to rise by around 5-8%, but reports show that the average cost of a flat or a house has actually increased by 10-15%. The price rise in properties comes following a steady growth in Berlin’s population, economic output and labour market.
Compared to that of other German cities, such as Hamburg, Frankfurt and Munich, the price per square meter in Berlin is 2-3 times less expensive. Berlin is Germany’s capital city and is currently ranked first among all major cities and capitals in terms of quality of real estate investment.
This surge in Berlin property prices warns that there may be a bubble that’s about to burst. Despite the booming economy and record-low interest rates, the European Central Bank has warned that property bubbles may be developing - with a potential risk for financial stability.
The Prime Global Cities Index tracks the movement in luxury residential prices across 45 cities globally. It has reported that Berlin, Frankfurt, Edinburgh and Paris are all out in front when it comes to the rise in property prices. They stated that all of these four cities have a few things in common, strong tenant demand, limited new supply and relative affordability.
10 fastest rising property markets for 2019
- Berlin - 14.1%
- Moscow - 12.0%
- Frankfurt - 9.6%
- Tokyo - 8.4%
- Edinburgh - 7.6%
- Paris - 7.5%
- Delhi - 5.8%
- Zurich - 5.2%
- Madrid - 5.1%
- Geneva - 5.0%
Some of the most popular - and therefore the most expensive - areas in Germany’s capital city are Mitte, Steglitz-Zehlendorf and Charlottenburg-Wilmersdorf. Cities close to Berlin are also seeing an increase in prices.
If you want to find out more about investing in Berlin property, take a look at our previous blog post: https://www.ew-realestate.com/news/article/122/investing-in-berlin-property