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Friday, June 14th, 2013

Continuous Growth in Rental Price Development for Berlin-Mitte

Continuous Growth in Rental Price Development for Berlin-MitteAs addressed in previous articles, it has taken a while for the eastern and western districts to reach a balance in Berlin’s real estate market. During the decade following reunification, rent was predominantly lower in the eastern part of the city – the first rental contracts from eastern districts reported low lease rates, while buildings previously owned by DDR Municipal Housing remained vacant. However, since the turn of the millennium the situation has begun to stabilise and the last seven years in particular have seen an incredible rise in rental prices.

Continuous Growth in Rental Price Development for Berlin-Mitte

Source: Own weighted Calculation, Immowelt.de, IDN ImmoDaten GmbH, Jones Lang LaSalle GmbH

The graph above refers only to Berlin-Mitte (excluding Tiergarten and Wedding) in comparison to the Berlin average. Development in Berlin-Mitte’s rental prices shows an important increase within the time frame studied, registering a 66.7% increment over the past seven years. Generally speaking, all of Berlin’s districts reflect this positive trend, yet most still have a low rent average per square metre. In 2012, for example, the average rental price in the city was €8.25 per square metre – much lower than the average for Berlin-Mitte.

Prices in this central district range between €4.50 per square metre and €29.00 per square metre. Apartments smaller than 40m2 average a price of €14.95 per square meter, while apartments between 40m2 and 80m2 average €12.85 per square meter. The indication is that small to medium-sized apartments (those between 40m2 and 80m2) take maximum advantage of the market conditions.

Berlin-Mitte is one of the few districts in the city where rental prices are comparable with other European capitals. This, combined with the district’s popularity and its vacancy rate, means that rental prices are sure to increase over the coming years and that market trends will remain positive.

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