Property prices across Germany stagnate, while prices and rents in Berlin continue to rise

The real estate markets in Germany and Berlin are experiencing mixed fortunes. In its new housing index, the German Economic Institute (IW) reports that purchase prices for real estate in Germany remained largely unchanged at the end of the year – while new contract rents increased by approximately 4.7% on average compared to the previous year. In contrast, the real estate market in Berlin is far more dynamic, with the IW reporting an 8.5% increase in new contract rents during the same period. This growth can be attributed to the ongoing shortage of living space, which has resulted in increased rental demand and subsequently higher rents, especially in major cities and popular locations such as Berlin. The ImmoScout24 Residential Barometer paints a more nuanced picture, putting the average price per square meter of a new-build apartment in Berlin at EUR 6,575 . For the end of 2024, the barometer indicates an increase in new-build prices in Berlin of 1.4% compared to the third quarter and 2.5% compared to the previous year. Existing apartments, on the other hand, cost an average of EUR 4,643 per square meter, representing a year-on-year price increase of 2.1%. Dr Gesa Crockford, Managing Director of ImmoScout24, attributes the rising purchase prices to an unprecedented surge in demand: „Demand in metropolitan areas and major cities has reached new heights, surpassing even the levels seen during the low-interest phase at the beginning of 2021.“