Cologne Institute for Economic Research (IW): Homeownership in Berlin is unaffordable

A recent study conducted by the Cologne Institute for Economic Research (IW) and commissioned by the mortgage broker Interhyp reveals that almost no other German state is as unaffordable for homebuyers relying on mortgages as Berlin. In a comparative analysis of all German states, Berlin ranked second to last for affordability, just ahead of Bavaria. While affordability has improved across all states since April 2023, buying a home in a high-priced region remains a significant challenge. In Berlin, affordability has improved by 14 per cent since April 2023, however, persistent high demand coupled with limited supply continues to drive prices higher, according to Michael Voigtländer of the IW. He explains that a lack of available equity, particularly among young families, is a key factor contributing to declining homeownership rates, and calls for urgent political action. He notes that the situation is even worse in the areas around Berlin, particularly in neighbouring districts in Brandenburg. According to the study, houses in Potsdam are the most unaffordable in the region, while the districts of Potsdam-Mittelmark, Havelland, Dahme-Spreewald, and Oberhavel present even greater challenges for prospective homebuyers than Berlin itself.