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Wednesday, September 23rd, 2015

Berlin, the city of development sites

Construction boomThe German capital Berlin, which is simultaneously the centre of politics in Germany, is becoming the biggest building development site in the country. At present, no other city in Germany offers as many building sites with cranes like this metropolis sitting on the River Spree. The Investitionsbank Berlin (IBB) verifies in a forecast regarding the construction boom, that it will not disappear over the next few years. Throughout the next year, an expected 55,000 new flats will be built. This figure is based on the number of building permits which, between 2015 and 2017, should be more than 100,000.

Era of the reunification is trumped by the present construction boom.

According to a balance sheet from IBB, around 20,000 planning permissions for the whole of 2014 are listed. Hence, this calculates a yearly increase of 35,500 permits between 2015 and 2017. If you think back to the time of the reunification, there had been around 30,000 building permits in 1995 – 70% of which had been in the eastern part of the capital city. This number shows that each stage through to today’s boom in the construction industry has long since been outdone.

Berlin’s growth continues

One of the most important reasons for the construction boom in Berlin is found in its increasing numbers of immigrants. The net immigration into Berlin up till now, amounts to 40,000 people a year, a number which the IBB believes will also increase. At the end of 2013, there were around 1.9 million flats in Berlin, and so according to an estimate from the Berlin Senate, the construction of a further 140,000 dwellings is needed till 2030. The demand for flats in the capital, triggered by the currently dominating period of low interest rates (which in general favors investments in tangible assets), seems, in comparison to the persistantly uncertain financial position in the Eurozone, to be another reason for the construction boom in the capital city.

Ample plots for the construction of new flats

According to IBB, the positive effect of the building boom has slowly arisen, because the process from authorisation to the construction of a flat, should this be the case, empirically takes several years. IBB’s data shows that around 70% of building projects in Berlin are completed. However there is no reason to worry, because Berlin has, at least in comparison to other German cities, much more potential space for building flats. Aside from the capital, the situation of the housing market in other conurbations is likewise more relaxed. The nationwide numbers of building permits have been on the rise since 2010 and in 2015, the trend still continues further, even if the slightest decline is noticed. According to the German Federal Statistics Office, more permits for apartment construction projects were given out this year than last year, noting an increase of 1.5% just from January to March alone.

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