Latest News

Berlin: Gap between the city centre and the outskirts

March 19th 2019

By Housing Market Report Berlin 2019 BERLIN HYP & CBRE

 

Rent levels and the share of housing costs strongly depend on the spatial location. The most favourable conditions are predominantly in the large housing estates of the 1960s to 1980s.
The 40,154 asking rents recorded for this report are assigned to Berlin’s 190 postcode areas. This allows a precise small-scale view and, therefore, a much more precise picture of the asking rents on the level of the twelve districts. The absolute, average asking rent per square metre and month in each area, on the one hand, is very informative; on the other hand, information can be obtained from their relationships to the local purchasing power per household, the housing cost ratio. Both values are highest in the city centre, tending to be lower in peripheral locations.

There are some areas with relatively low asking rents, but relatively high purchasing power, where households have some leeway for other expenditures. The highest housing cost ratios, on the other hand, are also found predominantly in the postcode areas which have the highest asking rents. Purchasing power per household there is usually only averagely high.


Lower priced stocks also in the city centre


A glance at the map illustrates a clear picture of the rent levels: nine of the ten most expensive areas are located in or adjacent to the historic district of Mitte. However, the building stock in Berlin’s central location is also very heterogeneous in part. In addition to various new and renovated old buildings, there are numerous prefabricated and modest old buildings, municipal estates as well as houses disadvantaged by their location (such as heavy traffic) in which the rental conditions are even affordable for households with medium or low incomes.


Special position north of Berlin’s Central Station


Privately financed new construction is generating a noticeable effect on rent development. The 10557-postcode area around the Hauptbahnhof central station is a unique example of this. A significant increase in the number of offers here
has been accompanied by an enormous increase in rents. This is probably due to the many new buildings along Heidestrasse in the Europacity subdistrict. In 2015, the median there was still well below €10.00 per square metre; it had risen to €15.00 by 2018. In the highest rental category, only one area is located outside the city centre: the area around
Ludwigkirchplatz (postcode 10719) south of Kurfürstendamm. There are also other neighbourhoods in the vicinity ranging between €13.00 and €13.99. These also include sought-after neighbourhoods of old buildings in the east of Friedrichshain-Kreuzberg and bordering on Neukölln North, as well as in Pankow’s Prenzlauer Berg. The Grunewald villa district (14193) is the only area outside the inner city in this asking rent class.

Higher rents almost only in the city centre


The price group between €12.00 and €12.99, especially, covers many parts of the city centre. It is strongly concentrated in Charlottenburg-Wilmersdorf, where nine areas of this category can be found. The west and centre of Kreuzberg, as well as Neukölln North and Schöneberg, make up a second focal point. This group also includes one residential area outside the city centre: Dahlem (14194). The areas between €11.00 and €11.99 are mainly located on the outskirts of the city centre near the S-Bahn ring or close outside of it in various districts. In the next lower categories, the cheapest inner-city areas can be found; additionally, decentralised locations in Pankow and Steglitz-Zehlendorf also belong to these classes.


42 areas, the largest group, account for a range of between €9.00 and €9.99. The only characteristic that all quarters share is their relatively remote location. This also applies to the next lower category of asking rents. The picture only becomes clearer again in the lowest price categories below €8.00: high-rise buildings from the 1960s to 1980s can be found in almost all areas of Berlin.


High pressure also in the city’s outskirts


In terms of housing cost ratios, the historic district of Mitte and the area around Kurfürstendamm dominate the category starting at 38.0 per cent. One category lower, it shows a different picture: in addition to well-known high-price locations,
there are also areas on the outskirts of the inner city with increasing attractiveness but traditionally low purchasing power, such as Sonnenallee North in Neukölln (12045), Humboldthain in Mitte (13355) and Ostkreuz in Friedrichshain-Kreuzberg
(10245). Even in the next lower category, between 32.0 and 34.9 per cent of the housing cost ratio, almost all postcodes are still in the city centre.

The areas between 29.0 and 31.9 per cent are also still predominantly located within the
S-bahn ring, but no longer exclusively. One cluster in northern Charlottenburg-Wilmersdorf is a striking feature here. The rent level there is high, but so is the average purchasing power. Mitte, namely in Moabit Wedding, is also strongly represented in this category. Neither are traditionally affluent districts, but due to their proximity to the city centre they are now strongly in the focus of prospective tenants. In the category between 26.00 and 28.90 per cent, particularly noticeable is a high concentration of areas in western and southern Charlottenburg-Wilmersdorf. Purchasing power is consistently strong and is in a favourable proportion to asking rents. The areas in the two segments with housing cost ratios of between 20.0 and 22.9 and 23.0 to 25.9 per cent are located in the most varied locations and conditions. The most striking feature that all areas share is their location outside of the S-bahn ring.

The 16 areas, in which the average asking rents are lower than 20 per cent of the average local household purchasing power, form one category of its own. They are located almost exclusively on the outskirts of the city and comprise large parts of the large housing estates Marzahn and Hellersdorf. But they also include some locations far from the city centre with many singlefamily houses, quite high purchasing power and moderate rent levels, such as Bohnsdorf, Mahlsdorf and Müggelheim.