Berlin property prices are rising, driven partly by an increase in the number of overseas buyers looking for a home in the city, according to the Financial Times this week. Prices rose by 8.3% last year, and are showing no signs of dropping. Germany in general, and Berlin in particular, have strong economies compared to much of the rest of Europe. It is not difficult to see why property buyers are flocking to Berlin. The city has a vibrant arts and cultural scene, legendary nightlife, plenty of history and a friendly feel. It makes a great short-break destination, and is a good place to buy either a holiday home or an investment property.
Buying in Berlin
Buying property in Berlin should be seen as a long-term investment, as any property sold within ten years in Germany will attract a 15% capital gains tax. While property is generally cheap, associated costs are higher than in the UK, so be prepared to meet those. Remember too that you will need to get holiday home insurancein place once you’ve bought, and that there may be maintenance costs.
Most properties in Berlin are apartments, with prices for one-bedroom apartments in the city centre starting at around 90,000 Euros. Central apartments are likely to do well on both the short and long term lettings markets.
Where to Buy
The most central area of Berlin is Mitte, home of famous landmarks like the Brandenburg Gate, as well as lots of bars and restaurants. This is a good area to buy in if you want to rent your property out as a holiday home. To the west of the city centre you’ll find upmarket districts like Charlottenburg, with luxury shopping and good quality housing stock. To the east are rapidly gentrifying areas like Friedrichshain, once gritty and industrial but now increasingly popular with professionals, as well as artists and students. The Kreuzberg district is an ethnic melting pot, with a high Turkish population and a strong alternative cultural scene. If you’d prefer to move away from the city centre, look north to Spandau and Reinickendorf, which offer a distinctive village-like atmosphere.