What’s in store for Berlin’s property market: analysts’ forecasts
According to GUTHMANN, Berlin’s property market has experienced a surge in activity since the beginning of the year. In the first few months of the year, prices rose by an average of 1% and rents by 16%. Analysts attribute this momentum to political changes.
Elections were held in Germany in February. At the same time, the political forces presented a number of initiatives affecting the regulation of the property market. The focus was on this sector, which is still recovering from the crisis.
The GUTHMANN survey reflects current trends:
– the average price per square metre on the secondary market is EUR 5,380;
– new buildings are sold for EUR 8280 per square metre;
– the difference between the asking price and the certified price is up to 6%;
– rents continue to rise. At the same time, the difference in payment between secondary market properties and new buildings has reached a historical maximum.
The greatest demand for secondary housing is in the area around the capital’s S-Bahn station. There are no clear location preferences for new construction.
Generally, the trends indicate that sellers are optimistic. They are active in the market, which is helped by lower interest rates. At the same time, buyers feel that there is more scope for negotiation.
In 2023, property values in Berlin and Germany began to fall due to geopolitical conflicts and rising inflation. By the beginning of 2025, however, experts see prices stabilising. The price per square metre stopped falling, both in the new construction segment and in the secondary market.
Specialists registered 9,700 purchase and sale transactions in 2024. Of these, 1,100 were in the new construction segment and 8,600 in the secondary housing segment. Experts note the stable development of the new-build sector, but the outlook for existing homes is mixed.
Market forecasts
Colliers forecasts a moderate increase in the number of transactions on the property market in 2025. At the same time, the number of transactions will be below average, reflecting the problems in the market. According to analysts, Berlin is experiencing an economic downturn exacerbated by structural difficulties. However, the situation should improve in the current period.
Positive momentum is also related to the European Commission’s forecasts:
– inflation will fall by more than 2% in 2025;
– in 2026, it should fall by 1.9%;
– GDP growth will be 0.7% in the current period;
– GDP will grow by 1.3% in 2026.
Another favourable factor for the capital’s property market is rising household income. This is leading to an increase in private consumption, albeit at a slow pace.
Lower interest rates will stimulate activity in the construction sector. Demand for new properties is already rising and will continue to do so.