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Berlin rents rise above record €10 per square metre

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Berlin rents rise above record €10 per square metre
A 'for rent' sign in Berlin. Photo: DPA
12:13 CET+01:00
Berlin rents continue to rise. A new report shows that the average price has cracked the €10 per square metre mark for the first time, with further increases forecast.

For the city which has long celebrated its ‘poor but sexy’ moniker, the study's findings are a reminder for many of the changes taking place in Berlin. 

The study was completed by commercial real estate provider CBRE Berlin and Berlin Hyp AG, a large German mortgage bank. The researchers looked at 81,000 rental offers from 2017 to 2018 across all 12 districts in the city, finding that the average cost per square metre is now €10.34.

SEE ALSO: Berlin has fastest growing housing prices in the world, study finds

This amounts to a 5.6 percent increase on the average set in the previous year. 

The figures do not take into account the prices of currently rented properties, only those which came onto the market during the last year.

Rent control laws in Germany, including the controversial Mietpreisbremse, act to restrict increases in costs of ongoing rent contracts but have less control over newly rented properties. 

Location, location, location

While the breaching of the €10 per square metre mark is a city-wide average, there was a wide divergence in rent prices depending on the district. 

In the highly sought after inner-city neighbourhood of Friedrichshain-Kreuzberg, costs rose by an average of 9.1 percent to €12.99 per square metre. 

The lowest average rent in the city limits was in the Marzahn-Hellersdorf district, where the average cost was €7.73 - which still represents an increase of 5.3 percent. 

Protest movements have become more common as rents have continued to rise. Image: DPA. 

Slowing growth? 

Perhaps the only silver lining for residents or prospective residents of Germany’s largest city is that the increase in prices is slowing. While rent costs across the city increased by 5.6 percent from 2017 to 2018, rental costs increased by 8.8 percent in the previous year. 

The slowed growth even saw a downturn in prices in some limited areas of the city - with a 0.8 percent decrease in rental costs in the borough of Lichtenberg. 

SEE ALSO: People in Berlin think life ends outside of the Ringbahn. They're wrong.

The authors of the study however have thrown cold water on these suggestions, indicating that price rises are likely to continue. 

“Even though rental price growth in Berlin has slowed down slightly, there is no trend in it. Rather, the rate of increase was roughly at the same level as in 2016,” said Gero Bergmann, speaking on behalf of the authors of the project. 

No end in sight? 

Rent price increases are a frequently debated topic across Germany, particularly in the larger cities like Hamburg, Munich, Frankfurt and Berlin where costs are on the increase. 

Despite law reform efforts targeted at curbing rental increases, costs continue to skyrocket. 

A range of solutions have been considered and debated, including strengthening rent controls or even more radical solutions like socialising the property assets of large firms

While demand is unlikely to decrease anytime soon, the construction industry has sought to boost supply in recent years. 

As reported in the Berliner Morgenpost, there are currently 26,000 new apartments in the process of construction across Berlin.

While this may somewhat improve supply for the estimated 40,000 people that move to the city each year, concerns remain that the focus of builders is on luxury apartments, with the lower end of the market continually ignored.

SEE ALSO: The complete guide to how you can (still) live cheaply in Berlin

 
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