7. Aug 2018 - CAPITAL.de

Why Apartment Prices Are On The Rise…

... and why they could fall again. John Amram on the reasons for rising prices for apartments in Berlin and why the explanation ‘high demand, low level of supply’ is inadequate.

As prices for residential real estate in Berlin are seeing an ever upward trend, more and more people are asking themselves: “What are the reasons for this boom?”. Is it just the high level of demand for apartments in the capital? Are so many millionaires moving there? Is there no investment alternative as a consequence of low interest rates? Is there not enough new housing construction? The answers differ according to the political allegiances of the respondents. One side rails against the investors, the other against an inactive public administration; others blame the global market and the low interest rate phase, before going on to praise the security which Germany offers international investors. [...]

This article was originally published in German only. A summary in English is available.

Summary

Berlins residential real estate prices have risen continuously over the past years.Those looking for causes will recognise that there are many more nuanced interrelationships than this one simple answer: if supply is too limited and demand is too high, prices rise. Historical factors as well as zero-interest politics in particular also have an important part to play. However, a rise in interest rates may soon cause a downturn on the Berlin real estate market, explains John Amram, managing director of HPBA GmbH.

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