According to a new report by one of Berlin’s largest real estate companies, condo prices will maintain sustainable growth in the coming years. The growth is driven domestic and overseas consumers alike.
I’ve decided to look into the news and find out more.
The research was conducted by Ziegert Berlin, whose Managing Partner Nikolaus Ziegert said:
„For condominiums in the Mitte district, we predict a continued growth in the double-digit range“
Within five years, we will achieve a price level of 10,000 euros in the high-end segment.“
Several factors are contributing to the increase. For instance the district has seen population growth of 80,000, there is ‘broad-based’ and stable economic development which is twinned with slow building activity. These indicators lean in favour of a positive price trend for Berlin’s condo market.
„For the time being, the city offers potential for opportunistic investors as well as for buyers with a long-term horizon,“ said Nikolaus Ziegert.
„Compared to London, Paris or Munich, Berlin remains quite affordable and is simultaneously barely exposed to the risk of deteriorating prices.“
New units in the Mitte district have a rental yield of over 4% according to Ziegert. Rents in historical period buildings have been capped by recent legislation, but still offer positive yields.
New units are still more of a positive asset for investors looking for high yields, as they can be pushed beyond 6%. Investors looking to invest in historical property with more sentimental and long-term value may not be as interested.
„Over the past years, Berlin has become more international. This has in turn boosted demand for furnished apartments, especially in the high-end segment“ said sources from Ziegert.
International buyer demand has noticeably diversified in recent months. New groups of leads have been welcomed to the market.
Sources from Ziegert said:
„For example, we sold four out of 64 condominiums just 600 meters from the Brandenburg Gate to Swiss leads, others to buyers from Australia, China, Russia, Italy, the UK, France, Spain, Luxembourg and the United States, so that we had an international share of 40% at the end of the day.“
Buyers from New Zealand, Sweden and Israel are prominent, according to Ziegert.
In conclusion, Berlin’s residential market is an international, budding arena – investors should register their interest in order to capitalise on the growth of the area.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.