Diamona & Harnisch - Life's Finest Values
Menu
Blog | 29. November 2016

IN BERLIN, HOME OWNERSHIP IS GETTING MORE EXPENSIVE – AND PRICES ARE RISING FASTER THAN EVER

The German real estate boom continues – and with far-reaching consequences. Prices are rising constantly, especially in major cities such as Berlin. Beyond the most sought-after central districts, the price of development land has now risen to €200 per square metre – an increase of more than 11 percent in comparison with autumn/winter last year. The only cities that have seen land prices accelerate at a faster rate are Frankfurt/Main, Munich and Bremen, as confirmed by the IVD real estate association. The average asking price for a new condominium in Berlin has now climbed to €4,100 per square metre. Older apartments now cost an average of €1,950 per square metre – an increase of 5.41 percent.

One reason that prices continue to rise is the shortage of housing in Germany’s major cities. In Berlin, despite an increase in construction activity, there is still too little housing – and demand is strong thanks to the influx of new Berliners. And it looks as if the situation is not about to change any time soon. The real estate agents’ association, IVD, assumes that inward migration and the shortfall in supply will drive real estate prices 25 percent higher in Berlin over the next five years.

MAKE THE MOST OF THE BOOM ON THE BANKS OF THE SPREE

For buyers and investors there has never been a better time to enter the Berlin real estate market. Above all, condominiums are in high demand and prices have surged as a result. According to a new Postbank study, “House Price Atlas 2016 – Living in the City,” condominium prices have risen by 44 percent over the last 15 years. Given the city’s strong population growth, real estate experts are confident that prices in Berlin will continue to rise.

Would-be buyers shouldn’t wait too long before they take advantage of this situation – otherwise their dream home will be even more expensive. In Dahlem (in the district of Steglitz-Zehlendorf), the square metre price had already climbed to €4,759 in 2015, in Berlin-Mitte buyers had to budget €4,538 per square metre and in Kreuzberg prices had reached €3,420 per square metre. The IVD identifies Spandau and Reinickendorf as offering comparatively low prices. In these two districts a square metre costs between €2,500 and €2,700.

TAKE ADVANTAGE OF LOW INTEREST RATES FOR AFFORDABLE FINANCING

There is another very good reason not to delay a property purchase too much longer: The current low interest rate climate won’t be with us forever. After a number of lenders increased their construction loan interest rates in November, FMH-Finanzberatung forecasts that mortgage interest rates (whether for 5, 10, 15 or 20-year fixed-rate mortgages) are going to climb. It is still the case that developers and buyers with strong credit records can secure ten-year loans at less than one percent interest per annum. And those who are looking for 15-year fixed-rate loans, which are still a good option as long as interest rates remain so low, can find lenders willing to finance their property purchase at interest rates below 1.5 percent – an opportunity that buyers should certainly take advantage of.

Archiv

 
Blog | 29. November 2016

IN BERLIN, HOME OWNERSHIP IS GETTING MORE EXPENSIVE – AND PRICES ARE RISING FASTER THAN EVER

The German real estate boom continues – and with far-reaching consequences. Prices are rising constantly, especially in major cities such as Berlin. Beyond the most sought-after central districts, the price of development land has now risen to €200 per square metre – an increase of more than 11 percent in comparison with autumn/winter last year. The only cities that have seen land prices accelerate at a faster rate are Frankfurt/Main, Munich and Bremen, as confirmed by the IVD real estate association. The average asking price for a new condominium in Berlin has now climbed to €4,100 per square metre. Older apartments now cost an average of €1,950 per square metre – an increase of 5.41 percent.

One reason that prices continue to rise is the shortage of housing in Germany’s major cities. In Berlin, despite an increase in construction activity, there is still too little housing – and demand is strong thanks to the influx of new Berliners. And it looks as if the situation is not about to change any time soon. The real estate agents’ association, IVD, assumes that inward migration and the shortfall in supply will drive real estate prices 25 percent higher in Berlin over the next five years.

MAKE THE MOST OF THE BOOM ON THE BANKS OF THE SPREE

For buyers and investors there has never been a better time to enter the Berlin real estate market. Above all, condominiums are in high demand and prices have surged as a result. According to a new Postbank study, “House Price Atlas 2016 – Living in the City,” condominium prices have risen by 44 percent over the last 15 years. Given the city’s strong population growth, real estate experts are confident that prices in Berlin will continue to rise.

Would-be buyers shouldn’t wait too long before they take advantage of this situation – otherwise their dream home will be even more expensive. In Dahlem (in the district of Steglitz-Zehlendorf), the square metre price had already climbed to €4,759 in 2015, in Berlin-Mitte buyers had to budget €4,538 per square metre and in Kreuzberg prices had reached €3,420 per square metre. The IVD identifies Spandau and Reinickendorf as offering comparatively low prices. In these two districts a square metre costs between €2,500 and €2,700.

TAKE ADVANTAGE OF LOW INTEREST RATES FOR AFFORDABLE FINANCING

There is another very good reason not to delay a property purchase too much longer: The current low interest rate climate won’t be with us forever. After a number of lenders increased their construction loan interest rates in November, FMH-Finanzberatung forecasts that mortgage interest rates (whether for 5, 10, 15 or 20-year fixed-rate mortgages) are going to climb. It is still the case that developers and buyers with strong credit records can secure ten-year loans at less than one percent interest per annum. And those who are looking for 15-year fixed-rate loans, which are still a good option as long as interest rates remain so low, can find lenders willing to finance their property purchase at interest rates below 1.5 percent – an opportunity that buyers should certainly take advantage of.

Archiv

 

© 2017 D & H Projektmanagement GmbH | Voßstr. 23 | 10117 Berlin | T. +49(0)30. 89 38 46 0 | info@diamona-harnisch.com | Monday – Friday: 09:00 am – 18:00 pm
ImpressumHaftungsausschluss | Datenschutz

Instagram

© 2018 Diamona & Harnisch Development GmbH
Voßstr. 23 | 10117 Berlin | T. 030 89 38 46 0 | info@diamona-harnisch.com

Imprint & Disclaimer