The supply of housing (or, more appropriately, lack of supply) has been making headlines in both Germany and the UK this autumn. Property prices and rents seem to be increasing everywhere you look, and demand has been outstripping supply for some time. Well, now there is some good news, at least as far as Germany’s capital is concerned.
Housing: the good news
There is a clear increase in housing construction in Berlin, with higher than usual numbers of apartments either in planning, under construction, or recently completed. This is one of the major conclusions drawn by a study published as 2015 draws to an end by Hochtief Projektentwicklung that took a look at current projects with volumes of more than 1,000 square metres being delivered by private property developers in Germany. The following figures relate to what Hochtief calls “trader developers”, i.e. developers who have no intention of holding onto their project in the long-run—they aim to sell to investors as soon as they can.
Housing: Berlin leads the way
Hochtief has identified current projects in Germany’s seven biggest cities that are set to deliver a combined 3.8 million square metres of living space, an increase of 200,000 square metres on the previous year’s total. The headline figures might be positive, but the study’s authors expressed caution when they highlighted the fact that this “moderate” growth in housing construction is not enough to keep up with population growth in the country’s major urban centres. In fact, two large cities (Frankfurt and Stuttgart) actually saw a fall in construction activity.
Housing: new-build and modernisation
In terms of the raw number of apartments and square metres being built, Berlin leaves its peers for dust. More than a third of the country’s new residential space is being built in the capital (1.34 million square metres) and, when office and hotel projects are added, an astonishing 7 million square metres of space is being planned and built (15% more than was the case in 2014). If developments across all real estate sectors from other types of developer are included (i.e. local authorities, investor developers, etc.) the total actually smashes the 9 million square meter mark (9.1 million square meters). So there’s lots of construction and development work underway, and it’s not just work on new buildings. Berlin is also Germany’s clear winner when it comes to modernising existing space. Almost two thirds of the apartment refurbishments carried out in Germany this year were in Berlin (roughly 174,000 square metres).
Housing: rental and condominiums
Some other interesting details revealed by the study carried out for Hochtief Projektentwicklung by the independent analysts at bulwiengesa:
- the average new-build rental apartment in Berlin is 78 square metres,
- the average new-build condominium in Berlin is 103 square metres,
- rents for apartments currently under construction and in planning will be lower on average than rents for recently completed rental apartments,
- prices for condominiums currently under construction and in planning will be approximately 20% higher than prices for recently completed condominiums.
As the study included projects set to be completed by 2019, it will be interesting to see how many of the currently planned housing projects make it off the developers drawing boards, successfully navigate the city’s notoriously slow building permit offices and finally deliver the space this city desperately needs.
Leave a Reply