Sharp decline in Berlin's real estate market

Sales figures in the city have never fallen so sharply. Residential and commercial buildings as well as office space are particularly affected. Only houses are still in demand.

Strong corrections are shaping the Berlin property market in the first six months of this year. Both the number and prices of properties sold fell. The money turnover in trading office buildings in the capital fell by 70 percent compared to the previous year. The number of residential and commercial buildings sold fell by more than a third. The property valuation committee has published these figures.
The clear losers in the first half of the year are the residential and commercial buildings. Here, the expert committee corrected the average purchase price by eleven percent.
Surprisingly, the number of condominiums sold also fell by a fifth compared to the previous half-year. This cannot be due to the offer: Internet brokers such as Immoscout report that the number of condominiums offered for sale has recently risen sharply. It is quite possible that prospective buyers are holding back because of their uncertain income and job prospects as a result of the pandemic.
None of this has any impact on apartment prices, on the contrary: the expert committee calculated an average increase of six percent. This is little compared to the past few years. But this trend should be reliable, given around 6,500 apartments sold in the first six months of the year.
So has Corona or the introduction of the rent cap shaken the real estate market to its foundations? "People are insecure and have been reluctant to buy investment properties since the introduction of the rent cap," says Reiner Rössler, chief appraiser of the expert committee for property values.
In addition, in some cases prices "that the market cannot offer" would also be charged. But the (not yet published) sales figures from the third quarter that are being received by the committee do not currently suggest that the situation will deteriorate further this year.

Source: Tagesspiegel Berlin, October 27, 2020