HOW THE CORONAVIRUS IS FUELLING DEMAND IN BERLIN’S PROPERTY MARKET

24 July 2021

A recent article in the FT  reports how the temporary halting of construction during the coronavirus lockdown has added further to the pressure on supply in Berlin’s housing market.

The high demand for property drove prices in Germany’s seven largest cities – Berlin, Hamburg, Düsseldorf, Cologne, Munich, Frankfurt and Stuttgart – by 123.7% between 2009-2019 according to figures from Deutsche Bank. A growth rate nearly twice that of London (66%, Nationwide) and four times that of New York (30%, Douglas Elliman), over the same period.

Deutsche Bank predicts prices will continue to rise at a similar rate up to 2022, driven by scarcity of supply, increased immigration and the government’s deft handling of the coronavirus.

In the last decade Berlin’s population has increased by 3.4m to 3.7m and its rental market thrives. Jochen Moebert, analyst at Deutsche Bank, says “If there is an available apartment in Berlin you have 45 to 50 people that would like to have it.” In London, where approximately 60% of the population rent, the percentage of people who rent in Berlin is much higher, 85%.

Meanwhile, the German government’s handling of the coronavirus has only cemented the country’s international appeal in the eyes of investors and those looking to emigrate. Commenting on 24th July, the FT said, “as of this week, Germany had recorded more than 9,100 Covid-related deaths out of its population of about 83m people; in the UK there have been more than 45,400 deaths out of about 67m people. For many, both inside and outside Germany, the pandemic has highlighted the country’s appeal: low unemployment, a generous and accessible healthcare system, effective political leadership and a stable society.”

Read the article in full here.