CORONA AND THE BERLIN PROPERTY MARKET: HOW PRICES HAVE DEVELOPED

The coronavirus and the resulting political and economic developments have changed our lives, including the property sector. But how have coronavirus, working from home and short-time working affected the Berlin property market?

Demand on Berlin’s property market remains high

According to recent surveys by Berlin’s expert committees, the coronavirus has had no negative impact on demand in Berlin’s residential property market. In fact, demand for residential property remains high. Due to the limited supply, property prices even rose in the coronavirus year 2020 – by six to seven per cent compared to the previous year. Prices for condominiums and owner-occupied homes in particular have risen.

What are the reasons for the price increase?

One reason for the positive price trend on the Berlin property market is probably the home office. More and more people are working from home – and previously did not have sufficient space to do so. At the same time, the basic need for security remains high in times of crisis. A home or condominium offers more security than a rental property.

Last but not least, Berlin has always been a very dynamic, popular property market, with many newcomers flocking to the city every year – while only a few Berliners move away, at most to the surrounding areas, which are also in great demand.

Does this trend apply to the entire property market in Berlin?

Corona is dividing the property market. While condominiums and owner-occupied homes are in high demand, demand for residential and commercial buildings as well as purely commercial properties is declining. According to Berlin’s expert committee, prices for commercial properties have fallen by up to 34%.

However, the reason for this is not necessarily just coronavirus, but also the rent cap, which limits the rent level and thus also the rental yield.

Who benefits from the current situation?

Owners who were already thinking about selling their property can currently realize good proceeds and be sure that the sale will proceed quickly. Even if the corona restrictions require more distance and the marketing process may be somewhat delayed as a result, potential buyers can be found quickly on the Berlin property market.

Companies, start-ups and tradespeople could benefit from low property prices. So if you have already considered buying a property as a business asset, now could be the right time. We would be happy to help you with this endeavor. Send us a message or give us a call.