Mainstream and prime property prices in Berlin have recorded strong growth over the last five year due to a shortage of new supply, an expanding population, a strong economy and a robust labour market, according to a new report by Knight Frank.
Average prices in Berlin increased by 14.9% in the year to March 2018, outperforming London, but in line with rate of growth in Amsterdam and Edinburgh over the same period.
Knight Frank says that among overseas buyers, those from the UK, the US and Switzerland are the most active at the moment and looking for properties in the €300-700,000 price range.
Turkish buyers have been active since 2015 along with other Middle Eastern purchasers with many putting Berlin at the top of their safe haven list. Residents and non-residents are treated identically in terms of tax and purchase costs with many international buyers drawn to the market because of its high quality of life and relatively low cost of living.
The firm also points out that according to Deutsche Bank Research, rents increased by 11% in 2017. In Berlin new regulations introduced in 2015 prohibits landlords from increasing rents by more than 10% above the average for each area but the report points out that this only applies to existing homes, not new build apartments or refurbished flats.