Linkedin Post: 𝐁𝐞𝐫𝐥𝐢𝐧 𝐧𝐨𝐰 𝐡𝐚𝐬 𝐚 0.3% 𝐑𝐞𝐬𝐢𝐝𝐞𝐧𝐭𝐢𝐚𝐥 𝐕𝐚𝐜𝐚𝐧𝐜𝐲 𝐫𝐚𝐭𝐞. 𝐖𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐭𝐡𝐚𝐭 𝐦𝐞𝐚𝐧?

The latest report by BNP Paribas Real Estate highlighted that the residential vacancy rate had fallen to only 0.3%, a drop from the already incredibly low figure of 0.8% last year. In effect, this means that of all the housing available in Berlin, a city with a population of over 3.8 million people with 1.89 million residential dwellings, only 5,670 units were vacant when these numbers were calculated. 

Due to higher construction and financing costs the number of completions and permits are also expected to drop, with the demand / supply deficit in the city increasing to – 26,800 units for 2023.

Whilst rental prices continue to reach new highs, a 10% increase over last year, the new build market pricing remained neutral with a drop of only 1%. The consensus remains however that this was a temporary blip and growth will resume in 2024. It also contrasts with a 4.8% drop in London (ONS) where the forecast is less favourable for the following years.

Source: https://lnkd.in/d7-SimAv

Article:

Title: Berlin’s Housing Market: Opportunities for Sustainable Growth

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