04.09.2023 • 3 min. reading time
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Mainly falling purchase prices with rising rents
After a long period of soaring prices, purchase prices for residential property began to fall slightly for the first time last year. Triggers were the steadily rising inflation and the associated rising interest rates, reinforced by the war in Ukraine. This trend continued in the first half of 2023. However, the stagnating or falling purchase prices in Berlin are also being offset by a visible rise in rents. But to what extent have purchase and rental prices actually diverged in the German capital? VON POLL IMMOBILIEN experts have analyzed the average purchase and rental prices1 for apartments in Berlin's 23 districts2 for the first half of 2023 compared with the same period last year.
Daniel Ritter, managing partner at VON POLL IMMOBILIEN:
"The interest rate policy of the past ten years or so has really boosted the real estate market. Now that interest rates have reached a higher level, many prospective buyers have had to recalculate - some with the result that they can no longer provide the same financing for a property under the current circumstances. Many have therefore had to withdraw from the purchase and switch to a rental relationship. This increased demand for rental properties is ultimately having an impact on rental prices. While purchase prices for owner-occupied apartments rose slightly to moderately in only five of the 23 Berlin districts analyzed, rental prices climbed significantly in all districts during the same period. A total of 16 districts even call rent increases in the two-digit range."
An exception forms Zehlendorf - the only district, in which the rent prices with 0.3 percent (rent: 14.17 €/m2) after all only stagnated. The gap in the development of purchase prices and rents is most pronounced in Hohenschönhausen. There, in the first half of 2023, there was the largest reduction in purchase prices in the entire ranking, at -7.2 percent (purchase: €4,257/m2). Rents for condominiums, on the other hand, increased the second most, by 17.5 percent (rent: €10.74/m2). In the Weissensee district, there was the second-highest reduction in purchase prices. These gave way with -6.5 percent (purchase: 4,968 €/m2), while the rental prices with an increase of 9.9 percent (rent: 13.22 €/m2) still remain just below the 10 percent mark.
Fig. 1: Purchase and rental price development in Berlin districts, HY1/22 vs. HY1/23 (Graphic: von Poll Immobilien GmbH) - interactive graphic incl. figures by mouseover: https://www.datawrapper.de/_/DF1w5/
Dropped the average purchase prices in Treptow and Mitte by -5.6 percent (purchase: 4,260 €/m2) and -5.3 percent (purchase: 8.398 €/m2), rental prices increased by 13.9 percent (rent: 14.81 €/m2) and 13 percent (rent: 23.98 €/m2) respectively.
Andreas Gräfenstein, branch manager at VON POLL IMMOBILIEN Berlin - Treptow-Köpenick:
"Due to the rental situation in Berlin, buying a property is still the best alternative. We currently do not see that the city will succeed in the short or medium term in counteracting the lack of living space in the long term. The steady influx of new residents and the switch of many prospective buyers from the purchase market to the rental market will further increase the pressure on the rental market. In addition, interested parties should not forget that a property is also always a very good retirement provision. The most sought-after areas in our city are currently Altglienicke, Johannisthal and Schöneweide. All three areas are close to the city center but still very quiet and have very good transport links. The price-performance ratio as well as the offer are also right. Here, small families and couples will find a suitable property, just as multi-generational households or larger families."
Much smaller price reductions in the purchase of condominiums were in the first half of 2023 in the districts of Steglitz with -2.2 percent (purchase: 5,104 €/m2) and Wilmersdorf (purchase: 6,712 €/m2) and Pankow (purchase: 5,122 €/m2) with -1.5 percent each. The situation is different when it comes to rents: At 17.3 percent (rent: €14.73/m2), average rents for apartments in Steglitz rose the third most in the entire ranking. However, Wilmersdorf and Pankow also showed significant rent increases of 15.7 percent (rent: 19.80 €/m2) and 14.8 percent (rent: 12.82 €/m2).
However, there were also five Berlin districts in which the purchase prices for condominiums increased: Lichtenberg with 1.1 percent to 4,727 €/m2, Reinickendorf with 1.4 percent to 4,309 €/m2, Friedrichshain with 3.5 percent to 6,104 €/m2, Tiergarten with 6.2 percent to 6,344 €/m2and Marzahn with a plus of 7.6 percent to 4,250 €/m2. A look at rental price trends in the eastern districts of Lichtenberg and Friedrichshain, as well as Tiergarten in western Berlin, is also particularly interesting here. For although purchase prices have risen in these parts of Berlin, rents have also moved upwards - and not too slightly. Currently, prospective tenants in Tiergarten have to reckon with an increase of 16.9 percent to 18.98 €/m2, and in Lichtenberg even with a rent increase of 17 percent on average to 12.19 €/m2. There was a higher increase only for rental apartments in Friedrichshain, namely by 17.8 percent to 19.69 €/m2.
In Reinickendorf, however, the rents rose in the first half of 2023 with 9 percent somewhat less strongly in comparison. In Marzahn, the district with the highest purchase price increase within the analysis, rents also rose - albeit only slightly at 3.3 percent (rent: €7.77/m2).
Thomas Jaschinski, Branch Manager at VON POLL IMMOBILIEN Berlin - Marzahn-Hellersdorf
"Among the most sought-after areas in our area are Mahlsdorf and Marzahn, with houses in particular demand in Mahlsdorf and apartments in particular in Marzahn. Due to the very high price level in the neighboring districts of Friedrichshain and Lichtenberg, many interested parties are expanding their search radius - this also explains the rising prices in the Marzahn purchase as well as rental segment. The district also has much more to offer than just the large urban estates from GDR times, which most people probably think of first. Marzahn is a very green district. After all, in addition to the impressive Biesdorf Palace Park, the Gardens of the World are also located in Marzahn."
Property price analysis Berlin districts for apartments in the stock
Fig. 2:Development of purchase and rental prices in Berlin districts, HY1/22 vs. HY1/23 (Table: von Poll Immobilien GmbH)
1 The data basis of the purchase price analysis for condominiums and rental prices for apartments in the portfolio (up to and including 2019) is based on the average asking prices in the first half of 2023 compared to the first half of 2022 from GeoMap and VON POLL IMMOBILIEN Research (2023).
2 For the urban division, VON POLL IMMOBILIEN refers to the division of Berlin before the district area reform in 2001 into a total of 23 districts.
