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Berlin is booming – and bursting at the seams! The metro region is home to around 4.5 million residents, which makes it the largest German conurbation after the Ruhr. Following long years of steady demographic growth, the number of new arrivals declined for the first time in 2020. Aside from restricted mobility in the context of the coronavirus pandemic, the strained housing market in Berlin is probably a key reason to explain the trend reversal.

Although the German capital is in urgent need of new housing, it has experienced a construction lull. During the first half of 2021, only 9,148 new apartments were approved, which is a year-on-year drop by more than a quarter. Moreover, the number of the eventually completed flats is always lower than the number approved. According to the Residential City Profile Berlin published by JLL, an annual demand of around 57 new flats for every 10,000 residential is expected for the years ahead (or about 20,700 new flats per year). In 2020, the completions level equalled 40 new flats per 10,000 residents (or +14,500 new flats in absolute terms), which not only falls short of this mark, but also trails the stats of previous years.

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Moreover, prices on the German housing market continued to climb at an average rate of 5.2 % nationwide. In Berlin, the dream of homeownership has an average price tag of €600,000 – an increase by well over 20 % over the past two years. The square-metre price for ownership apartments now averages €5,260. There is no sign that the strain will ease any time soon.

Since it is becoming ever harder to find affordable residential accommodation of the right size in Berlin, especially young families or couples planning to start a family are turning their backs on the city. What they have in mind is a place surrounded by greenery but still within easy reach of the city – ideally in properties built for energy-efficiency.

According to the Residential Market Report published by Berlin Hyp AG in May 2021, nearly one in five tenants is thinking about relocating. In 2020, around 20,400 residents of Berlin moved their places of residence out of the German capital to live in Brandenburg, the state that surrounds Berlin on all sides.

Many of those who need extra floor space are finding it beyond the city limits. The wish to start a family and lately the need to work from home necessitate more space at home. Homes both larger and still affordable are, of course, more readily available in the countryside than in the city. Young families therefore stand a better chance here to find a property that suits their needs.

The state of Brandenburg launched a housing construction program that is beginning to bear fruit. The number of planning consents issued for residential units has doubled while completions increased by 80 % between 2010 and 2019. In 2018, a total of 10,474 flats were completed in Brandenburg.

The upward trend has been matched by a growth in selling prices for apartments in the same state, especially for detached and semi-detached homes. According to Immowelt.de real estate portal, the square metre price for houses in Brandenburg rose by 13 %, faster than in Berlin even (11 %).