Why Rents, Sale Prices Will Keeping Climbing in Berlin

A recent study indicates Berlin’s real estate market will remain tight for years as new regulations and public pressure work against the construction necessary to meet the demands of the city’s growing population.

The Hauptstadt currently needs 77,000 more apartments to provide relief to the city’s difficult residential real estate market and already lacks enough vacant property to permit the necessary amount of residential construction, according to a Tagesspiegel report.

The conclusion was reached by the research firm Regiokontext, which completed a “Develoment of apartment demand” study for Berlin’s Urban Development Ministry.

To provide the approximately 60,000 people moving to the city every year, Berlin needs to add 20,000 new apartments annually but reportedly continues to fall short — only 14,000 new units were added to the market last year. By 2030, the city needs to construct 194,000 new units but only has the potential to add 179,000 by building rooftop flats and filling in vacant lots.

“All potential construction sites must now be considered,” Maren Kern, head of the Berlin-Brandenburg association of apartment companies (BBU), told the paper.

The city’s SPD-led senate promised to tackle the problem five years ago with little result. Plans to add apartments on the rim of the former Tempelhof airport were quashed by a public vote and, according to Tagesspiegel, new large subdivisions such as the Elisabeth-Aue in Pankow were put on hold by the governing coalition.

An effort to protect more trees has also reportedly made it more difficult to build flats on rooftops and in vacant lots.

The city’s oft-criticized construction minister Katrin Lompscher (Die Linke) is hoping the city’s own apartment companies can be part of the solution.

“The six government apartment companies will be responsible for about one-third of the new construction with just under 30,000 [new] apartments by 2021,” she was quoted by the paper as saying.

 

Photo thanks Martin Abegglen via Creative Commons.

 

 

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