Real estate prices Berlin 2024: Market Analysis & Forecast

After a decade of strong growth (the price of a m2 in Berlin has risen from €2,000-3,000 in 2012 to €5,000, €6,000 or even €8,000 per m² today), property prices in Berlin have slowed their growth? And yet, prices continue to climb: they are set to rise by a further 10.9% on average in 2021.

Sarra Saddek of the real estate agency Invest AB, which has specialized in Berlin's real estate sector for over 10 years, gives us her analysis of the evolution of prices per m2 in Berlin and trends in the real estate market, as well as her forecast of possible future developments.

1. Square meter prices and key figures for the Berlin real estate market in 2024

The average price per square meter in Berlin in 2024 will be €5,200 for older homes (“Altbau”) and €8,200 for new homes. These are the selling prices of rented and vacant condominium apartments combined.

Prices for new-build apartments in Berlin are higher than for older buildings, as they are more modern, more energy-efficient and generally better laid out (optimized square meters). Altbau” buildings, however, enjoy a certain popularity in Berlin (due to their charm) and also shape the real estate market.

Before giving you the prices per square meter per district in Berlin in 2024, it's important to specify that the value of a property depends on several criteria:

The availability of the property: a rented apartment will sell for an average of 20-35% less than an unoccupied one. Property size: the smaller the property, the higher the price per m². Its condition: a property in need of renovation will obviously be less expensive (on average, renovation costs range from €700 to over €1,000 per m²). Location: the neighborhood, of course, but also the fact that essential stores and public transport are within walking distance, for example.

The value of an apartment therefore depends on many factors, not just square meters.

Appartement-Berlin offers a free and detailed real estate valuation to find out the current value of a property.

How have rents changed in Berlin?

In Q4 2024, the average rent in Berlin was €12.53/m², compared with €11.81/m² in Q4 2023 (€9.41/m² in Q4 2020). There is a wide range between the lowest rents (€7.36/m²) and the highest (€30.61/m²). Rents are regulated by law in Berlin and Germany (Mietpreisbremse / Mietspiegel).

2. Berlin property prices over 10 years (to date)

Berlin property prices graph (2012 to 2024)

After rising steadily by 8-10% a year for 10 years from 2012 to 2022, the Berlin real estate market has slowed its growth and experienced a slight decrease in 2024 compared to 2023 in new homes (-0.76%) and a slight increase in existing homes (+0.96%). The price per m² in Berlin today stands at €8,200 for new-build and €5,200 for existing.

As can be seen in the graph above, the price gap between new and old has increased over time, from €1,000 in 2012 to €3,000 today.

By way of comparison, the average price per m² in Paris is €9,282 and €8,600 in Munich.

3. What is the price per square meter in Berlin by neighborhood?

Graph: Berlin square meter price by district for old housing in 2024.

Mitte tops the list with an average price per m² of €7800, well ahead of Prenzlauer Berg (€6150), Schöneberg (€5500), Charlottenburg (€6100), Kreuzberg (€6100) and Friedrichshain (€5900).

The Kreuzberg and Friedrichshain districts, which have become very popular in recent years, are now practically on a par with Schöneberg and Charlottenburg.

The neighborhoods of Neukölln and Moabit have also seen strong growth, with prices more than doubling over the past ten years (€4700 for Neukölln and €5300 for Moabit).

4. Berlin's economic context and real estate market dynamics (2010-2024)

1. Population growth and the city's attractiveness: Since the end of the 2000s, Berlin has experienced sustained growth, with its population rising from 3.3 million in 2012 to 3.9 million in 2024 (an increase of almost 40,000 people every year for the past 10 years). This demographic growth has increased demand for housing, and attracted national and international investors thanks to relatively low prices.
2. Favorable financial factors: Until 2022, low interest rates and the European Central Bank's monetary policy made financial conditions particularly attractive for investors, and favored real estate as an asset class (low interest rates make borrowing cheaper and therefore increase property prices). Since 2022, interest rates have risen again, and demand has slowed as banks have become more demanding in terms of buyer collateral (more equity). Since the end of 2024, interest rates have fallen again, buyers have regained confidence and demand remains strong.
3. There's a strong demand for housing in certain areas of Berlin. The districts of Mitte, Prenzlauer Berg, Kreuzberg and Neukölln are very popular with an international clientele and enjoy strong demand.
4. Limited increase in supply: Real estate supply is not keeping pace with demand, partly due to the limited availability of building land and complex, time-consuming building permit procedures, thus increasing pressure on prices.

Rising house prices are the result of Berlin's growing attractiveness, sustained demographic growth, a policy of low interest rates reducing the cost of borrowing, and limited supply.

On the whole, supply has increased, sometimes resulting in longer selling times. Buyers are taking their time to compare. However, in certain “micro-neighborhoods” such as Kollwitzkiez, sales can sometimes be made very quickly!

How will the Berlin real estate market evolve over the next few years?

5. Will property prices in Berlin continue to rise?

It's difficult to make predictions in the German capital, as price trends are influenced by numerous political, economic, financial and demographic factors.

First, let's take a look at the factors driving up prices:

1. Berlin is a city with strong economic growth averaging 5% a year for the past 10 years, and is home to a large number of start-ups (Tesla's Gigafactory (10,000 employees), Google, Delivery Hero, HelloFresh, Gorillas...).
2. Berlin is Germany's political capital and offers a stable environment for national and international investors.
3. Berlin's population continues to grow.
4. Berlin remains an extremely attractive city, both nationally and internationally. Although prices per m² have risen sharply, they are still significantly lower than in other European metropolises.
5. Inflation and price rises: prices have risen, particularly raw material prices, as well as wages, thereby increasing construction and renovation costs and hence the sale prices of new homes. While inflation was between 0.5% and 1.5% between 2012 and 2020, it rose to 3.1% in 2021 and peaked in 2022 at 6.9%, before falling back to 5.9% in 2023 and 2.2% in 2024.

Let's now take a look at the risk factors that can affect supply, demand and prices directly:

1. The ECB's interest rate hikes have increased the cost of home loans, thereby reducing the purchasing power of home buyers (who can borrow less with higher rates). Interest rates on home loans in Germany fell below 1% in 2021 and 2022, then rose sharply in 2023 to 3.5 to 4%, and have been falling again since the beginning of 2024. They now stand at 3.4 to 3.5%. Estimates point to a further slight fall in rates (which would push up property prices).
2. The political will to regulate rents (Mietendeckel, Mietspiegel) - despite the Karlsruhe Constitutional Court's annulment of the rent cap (Mietendeckel) on March 25, 2021, the nationwide rent cap is still being called for by the Die Linke party. However, it is unlikely to be implemented by the current coalition (“Ampel Koalition”) comprising the SPD, GRÜNE and FDP parties.
3. The teleworking/home-office trend and the desire for greater proximity to nature, which concerns young workers and families. This trend is driving up prices on Berlin's outskirts, but ultimately has little impact on prices inside the ring, given the strong demand for central districts.

Overall, it seems realistic to expect that property prices in Berlin will continue to rise slightly in 2025, albeit less than in the ten years from 2012 to 2022. The number of real estate transactions should also increase slightly in 2024. All in all, Berlin remains a very attractive market for real estate investors, thanks to its growing demand, stable prices and long-term appreciation potential.

How to find out the value of your apartment?

For an accurate estimate of an apartment's value, Appartement-Berlin offers a free and detailed property valuation.