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‚Berlin property market shifts from renters to buyers‘

„A new property market report shows that more and more people are buying apartments in the German capital, squeezing out low-income renters. Investment groups are also making more large-scale „portfolio“ purchases.“

So begins an article on the German government owned Deutsche Welle website.

The report noted that there has been a rapid rise in the overall population – circa 40,000 new Berliners per year -along with a disproportionate number of ’single-person households‘. All this has created a shortage of affordable housing in the city.

Berlin owner-occupied apartments

German owner-occupied apartments are taxed differently than those that are rented out. While owner-occupied apartments are regarded as a ‘consumer good’ rented apartments are taxed as a capital investment.

Therefore many Berliners see the relative advantage of buying their own flat and with the concomitant highly favorable trend in interest rates, owner-occupancy has in recent years become extremely popular. All indicators show that there is a very good chance that the proportion of owner-occupied homes will continue to increase in the next few years.

The problems described by DW are not unique to Germany or Berlin. The Irish radio station and website  ‚NewsTalk‘ mentions how Dublin’s and Ireland’s out-of-control rental market raises rental problems.

Over the last few years, German residential real-estate prices have soared, especially in the largest cities of Munich and Berlin. Some have seen this development as the start of a ‘housing -bubble’ similar to those in Spain and the UK, however the current German and Berlin property price increases are  fundamentally justified. They are more the result of property prices making up lost ground, having largely stagnated or even fallen prior to 2008.

Deutsche Welle or DW is Germany’s government owned international broadcaster available in 30 languages – via television, radio and the internet and often deals with issues in the Capital –or in German – the ‘Bundeshauptstadt’. It wrote earlier this year about ‚Berlin’s rental market -a nightmare to many‘.