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Wednesday, May 25, 2022

Rents in the center of Berlin rise to 13 euros -and to 10.51 euros in the surroundings

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If you are looking for an apartment in Berlin, you need a lot of patience and a good income. Housing has become significantly more expensive again, especially in the city center. Owners demand rents of 13 euros or more per square meter in almost all the free apartment center.

But with more and more Berliners moving out of the city gates because it’s greener and rents used to be cheaper, apartments are now scarce and expensive there too: 10.51 euros per square meter per month, which It’s barely cheaper than in not so central Berlin neighborhoods. And because the number of newly completed apartments is falling for the first time (it was 16,337 last year), a further increase in rents can be expected.

The state development bank IBB published these alarming figures in its “Housing Market Report 2021”. As a result, the quoted rent for free apartments increased by four percent last year. Until April of last year, the rent cap was still in force, which had drastically capped rents. After it was lifted as a result of the ruling of the Federal Constitutional Court, rents skyrocketed again.

The IBB reports that the number of vacant apartments and apartments advertised has not increased after the cap was lifted. The market researchers hoped that the owners would put on the market some apartments that were not initially rented again due to the cap and thus relax the situation, it did not materialize. Even the number of newly built apartments is not enough to alleviate the pressure of the market.

Not only is it more expensive for new rentals

“We urgently need a housing offensive, affordable apartments in all parts of the city,” said Construction Senator Andreas Geisel (SPD). He hopes to calm the situation with the “new construction alliance and a revised program of subsidies for the construction of new social housing”.

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This is urgently needed because the increase doesn’t just affect rents for vacant apartments, which landlords can rent at significantly higher prices when re-rented. Even those who have an apartment have to dig deeper into their pockets to pay rent. “Compared to 2016, the local comparative rent for 2020 (rent index) showed a growth of 10.5 percent,” write the authors of the market report. Portfolio rental prices have risen only slightly more slowly than average asking rents.

Income cannot keep up with rent increases

Berliners are feeling this in their pockets, because their “disposable household income” “continued to lag far behind the growth dynamics of demanded rents”. In any case, this applied until 2019; no more recent data available.

Between 2016 and 2019 around 94,000 new people moved to the city. During this period, however, only around 52,000 new apartments were added. With a statistical average household size of 1.8 people per apartment, the number of apartments is sufficient to meet demand.

However, the shortage persists due to “existing deficits from previous years”, writes the IBB. Also, not all newly built apartments meet the demand of those who move. Many new properties are expensive condominiums. These are often offered at high rents that few can afford.

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