modern building berlin

The new apartments in Berlin – A trend that worries me

While working at Progedo in Berlin as a relocation coach for the last years I have come across a lot of different building types and different landlords when searching for new homes for my clients. This post will be my view on my experience while working all over the city, consulting our clients from all over the world by translating, guiding and advising on the best way possible to obtain the life they dream about here in Berlin.

The city of Berlin is ever changing and all over the city new is mixing with old. This is not a bad thing in itself, it is a normal development a metropolitan such as Berlin. The thing that worries me however, is the fact that many of these new buildings have a lot of empty apartments and not only for a month but sometimes for a long time. Still new ones are being built all the while there is a shortage of affordable apartments. The same trend happens with modernized and renovated apartment buildings, pushing old tenants out due to rises in rent as they go forward.

The main reason behind these empty apartments is the price increase

The price point of these apartments is on average almost double of the “old” apartments since the newly built have a modern standard with high quality. It is understandable that the owners have to get their investments back but the price of an apartment should not only be adapted to the look, the district and the position in the building but ALSO on the demand in the market – and there is a huge demand on apartments in Berlin. These variables are not in balance, sometimes due to the fact that the owners often live in different  (more expensive) locations in the world and make an estimated calculation on what they have to get back in rent, based on numbers and in my opinion not at all based on these “soft” variables. I have talked to a few realtors when viewing these types of houses and got the impression that their work is being made more difficult based on this fact as well. These apartments are sometimes empty for a year but still the same standards are being built everywhere.

Berlin is and always has been a working class city

Berlin air view city centre

The average salary is still lower than in the rest of the country (due to the old division of the country putting Berlin in “East-Germany” and since the reunification in 1989 there has always been a clear difference, which is slowly changing). Based on the communication with realtors I meet on a daily basis the demand is the following: At up to 1000 EUR warm rent there is a massive competition in the market. Everything above 1200 EUR is harder to rent out for the realtors and owners. Which means in retrospect that you have a very good chance in getting an apartment that has a rent higher than 1200 EUR but almost an impossible task at hand if your budget is below 1000 EUR, which is the fact for most of the people in Berlin. Here is a calculation why this is:

New built houses have apartments with an average cold rent of 17 EUR / sqm or higher. If you want to afford a 2 room apartment with approximately 60 Square meter, this would mean that this apartment would cost round about 1020 cold rent + Extra costs + Electricity + TV Tax = ~ 1350 EUR total rent

 If you would want to rent an apartment like this example, you would need to prove a net income of 3000 EUR (since landlords want to see a salary of 3 times the cold rent in order to be able to approve you). For a single person, with an average salary in Berlin (~ 1200 EUR Net) this is not possible, even for 2 people this is on the border of what is possible. 

This results in a massive gentrification in the districts where new buildings rise and a flow of people moving to the outer districts and beyond to afford something for themselves and their families. Berlin is spreading, making the city center expensive and the outer parts more attractive for families – but where will all this end? Is the new rental law regulation the solution? We will soon post a blog post on that topic as well, the changes in the housing market and a prediction of what could happen, what is supposed to change with this regulation according to the politicians. 

Please let us know what your thoughts are, share experiences you have had, if you need assistance in relocating to Berlin or just need consultation of any relatable topic by contacting us: