The latest report released by BNP Paribas Real Estate has shed light on the increasingly dire situation within Berlin's housing market. According to the report, the residential vacancy rate in the city has plummeted to an astonishingly low 0.3%, a significant decrease from the already meager 0.8% recorded just a year ago. This means that out of the 1.89 million residential dwellings in Berlin, a mere 5,670 units were found to be vacant at the time of calculation.
The dwindling vacancy rate is exacerbated by a combination of higher construction and financing costs, which are projected to lead to a decrease in both completions and permits for new housing units. As a result, the demand-supply gap in Berlin is anticipated to widen further, with a projected deficit of 26,800 units for the year 2023.
In the face of such scarcity, rental prices in Berlin have continued to soar, registering a 10% increase compared to the previous year. Interestingly, the pricing in the new build market remained relatively stable, experiencing only a marginal 1% decline. Despite this minor setback, industry experts are optimistic that growth will pick up again in 2024, signaling a potential rebound in the market.
This contrast in market dynamics is further emphasized when compared to the housing market in London, where the Office for National Statistics (ONS) reported a 4.8% decrease in prices. The forecast for London's housing market appears less optimistic, hinting at potential challenges in the years ahead.
As Berlin grapples with a severe shortage of available housing and soaring rental prices, policymakers and stakeholders face mounting pressure to address the crisis and implement sustainable solutions. The need for strategic interventions to boost housing supply, control rental costs, and ensure affordable housing for all residents has never been more pressing. Failure to take decisive action risks exacerbating the housing crisis and widening social inequalities in the vibrant capital city of Berlin.
Source: https://lnkd.in/d7-SimAv
