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Now is the time to invest in Berlin property

Berlin – Europe's top destination for property investment in 2017.

PUBLISHED : Monday, 24 April, 2017, 9:57am
UPDATED : Monday, 24 April, 2017, 9:57am

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Berlin is a popular city for investors, but this year saw the German capital reach new heights when it was named the hottest tip for residential property in Europe by international consulting and auditing firm PricewaterhouseCoopers.

With more young families, businesses and international migrants choosing the capital over other German cities, demand for housing in Berlin is exceeding supply – which is great news for investors looking to buy property to let.

Ticking all the boxes

Berlin property offers a higher return on investment at less risk than other European capitals, particularly when it comes to high-end residential properties.

“Recently named the city with the most investment potential for 2017 by PwC, Berlin is the hotspot in Europe for property investors,” says Allyce Kluver, Senior Partnership Manager at Zabel Property.

“With prices steadily rising between 7 and 12 percent each year, rents increasing at a similar rate in prime locations and an occupancy rate below 1.5 percent due to a rapidly increasing population, a property investment in this city ticks all the boxes.”

Demand exceeding supply

Berlin's housing shortage is a major factor in the property price rise, and investors can maximize their returns by acting sooner rather than later.

The number of building permits granted each year currently falls short of the minimum requirement. However, this is expected to catch up in the next few years, and public housing companies have committed to build 54,000 new residential units in Berlin by 2026.

With fewer houses being built at present, property investors are increasingly looking to less strictly regulated alternatives such as condominiums, student residences and serviced apartments.

Prices for condominiums in Berlin have more than doubled since 2010 – an increase of nearly €1,700 per square meter – making this segment especially attractive.

Where to invest

New-build apartments are the biggest drivers of rental growth, especially in the high-end segment, which is seeing above-average price increases throughout the city. Investors stand to make the greatest returns by purchasing apartments in Berlin's most desirable neighborhoods.

Within the S-Bahn ring, trendy districts such as Friedrichshain, Kreuzberg, Neukölln and Wedding are seeing the highest rent increases. Even in established locations such as Mitte and Prenzlauer Berg, where rents are traditionally high, prices increased more sharply in the first six months of 2016 compared to previous half-years.

The Fritz: Furnished apartments in the heart of Berlin

One of the most exciting new investment properties in Berlin is The Fritz, a residential tower that's ideally situated in a new quarter of the central Mitte district.

Close to iconic attractions like the Brandenburg Gate and Tiergarten Park, The Fritz is walking distance from restaurants, supermarkets and parks, as well as bus stops and Berlin Central Railway Station for convenient travel across the city.

The Fritz features 266 apartments ideal for singles, couples and commuters, which range from practical 24-square-meter studios to spacious 47-square-meter apartments. Studios and one-room apartments are furnished and ready to move in, with furnishing optional for two-room units.

Find out more about The Fritz and other residential apartments in Berlin by clicking here or contacting JLL International Properties at +852 3759 0909 or irp.hk@ap.jll.com.