Berlin and German Politics

The End of Cheap Housing in Berlin?

Dozens waiting to view an apartment in Kreuzberg...

Once upon a time, artists moved to Berlin because it was cheap. These days, they move to Berlin because they’ve heard it’s cheap.

Berlin has long been popular because of its low cost of living. It gives one more time to create, and less time working that ungrateful side job. But as housing prices rise, Berlin seems less of an exception among European capitals.

Ok, ok. But is housing still cheaper that elsewhere?

Let’s look at buying (rent prices generally follow) and the cost per square meter (say, for a 100m2 apartment):

At first glance, Berlin is on the cheaper end among European capitals for housing. But one does not necessarily want to live just anywhere in a big city’s metropolitan area. This is certainly the case in Berlin. When I first came to Berlin in the late 90s, I fell in love with Prenzlauer Berg. I was amazed by the rambling old-world apartments to be had for next to nothing (average ‘cold’ rents were 5.39 DM, or 2.76 EUR per m2, in 1991 in East Berlin, or 276 EUR for 100 m2) . They were plentiful, often newly renovated, with big balconies, hardwood floors, high ceilings… 90s wealth and bourgeois charm brought to late 19th-century architecture. Similar spaces were located in neighbourhoods experiencing cultural Renaissance, such as Mitte and Kreuzberg. In recent years, parts of Neukoelln and Friedrichshain have joined to constitute what plenty of arty hipster types, for better or for worse (because there are plenty of other lovely neighbourhoods, but not as arty), think of as Berlin.

Here are the prices to buy today in those neighbourhoods (from the December 2011 Immobilienpreisspiegel from the city). They were once some of Berlin’s cheapest ten years ago and are now in line, or slightly more expensive, with elsewhere in the city:

  • Friedrichshain: 2.291 EUR/m2 (all December 2011)
  • Kreuzberg: 2.750 EUR/m2
  • Prenzlauer Berg: 2.860 EUR/m2
  • Mitte: 3.485 EUR/m2
  • Areas of Neukölln that have been gentrified are already going for 2.000 EUR/m2.

Rentals range between 10 EUR/m2 (for Kreuzberg and Prenzlauer Berg) and 15 EUR/m2 for parts of Mitte.

These prices are still cheapish for a European capital, but they are rising spectacularly. And, when one, for comparison’s sake, looks elsewhere in Europe, to the costs in similarly funky and central areas in other European cities, Berlin does not seem anomalous:

  • Ixelles, in Brussels: 3.053 EUR/m2 (September 2011)
  • El Raval, in Barcelona: 3.079 EUR/m2 (December 2011)
  • Barrio Alto, in Lisbon: 3.500 EUR-4.100 EUR/ m2  (December 2011)
  • Malasaña in Madrid: 3.823 EUR/m2 (December 2011)
  • Canal St Martin (10th), in Paris: 6.874 EUR/m2 (December 2011)
  • East London (Bethnal Green, Shoreditch): 6.200 EUR/m2 to 12.000 EUR/m2.

I just had a look at rents in central Madrid and they look on par with Prenzlauer Berg and Mitte.

So, where does that leave us?

Living in the scenester / arty areas of Berlin is now comparable in price to similar neighbourhoods of other European capitals apart from a few like Rome, Stockholm, Paris and London.

This will be a disappointment to plenty of ex-pats who moved to Berlin expecting it to be the bargain it once was. On top of it, buying in Berlin is now difficult and frustrating. Not only are there few old-world apartments left for sale (mostly because the grand majority of Berliners rent), but with the financial crisis many investors see Berlin real estate as a safe bet and they are increasing demand. Try sifting through what’s available on in Neukoelln, for example, and you will be surprised at how little you turn up. Those who have lived in Berlin a long time, and who remember what apartments used to cost, are perhaps kicking themselves by now. This memory might also prevent them from paying those higher prices today, although they might think twice about not doing so tomorrow. And try renting an apartment in this city, and you will face a huge amount of competition in neighbourhoods like Kreuzberg.

If you are after a funky neighbourhood, Lisbon, Barcelona are likely to cost you about the same as Berlin––if not this year, then certainly in a year or two’s time. We are certainly coming to the end of cheap housing in the German capital’s ‘cool areas’, unless the arts scene expands beyond those core neighbourhoods. This may well happen, as there’s plenty of room to grow. Cost of living is not simply one’s housing prices, and in much of Berlin going out and having a good time is still remarkably inexpensive.  I also think there’s a great deal to be said for breaking out of cool, boutiqued, Berlin (which is increasingly expensive) and living in neighbourhoods that are less fashionable and more affordable. For the moment, Berlin continues to have a remarkable atmosphere of creation, on which you can put no price tag.

The best advice for someone coming to Berlin is to move because they love the city, not because they think of it as a ‘deal’.




**Note: London and Brussels are based on the following information: In Greater London, the average cost of an apartment is 440.000 EUR and in Greater Brussels, the average cost is 208.365 EUR.  If this is a 50 m2 apartment in London, and a 75m2 apartment in Brussels, I have come up with rough calculations which do not seem that far off. The other cities are from published sources, follow the links.

Joseph Pearson

Joseph Pearson (1975) is writer and historian based in Berlin. Born in Canada, he was educated at Cambridge University, UK, where he received his doctorate in history in 2001. Since 2008, he has written The Needle, which has become one of Berlin's most popular blogs. His portrait of the German capital, Berlin, for Reaktion Press was published in 2017. His second book, My Grandfather's Knife, was published by HarperCollins and the History Press in 2022. He is also the essayist and blogger of the Schaubühne Theatre, one of Berlin's best known state-funded institutions. His writing has appeared widely in the press, literary and academic journals, and has been translated into Italian, German, French, and Arabic. Having taught at Columbia University in New York City, he lectures in Berlin at New York University Berlin (since 2012) and the Barenboim-Said Academy.

19 thoughts on “The End of Cheap Housing in Berlin?

  • I guess this is becoming like Paris,where the rich overruns the Hoods of the acctually poors,and try to put all poor people outta the citycore,and press them into ghettos like Marzahn,and so on.In the future it will be like it`s in Paris`s center,where the rent for a appartment is so high,that no one(except the really rich)could spend this money for a little flat.So the poor peops are attempt to leave these places they used to live their hole life.I guess the State of germany was a student of Paris and is now try`n to become same,unfortunately.Germany is `boutta break into it`s pieces……..Lets just lean back and enjoy the protest marches in reachable future.

  • Interesting piece, and well researched — I just calculated the cost of my bobo chic-bare appartment in well-gentrified Kreuzeberg and it is exactly the average you give above! The agent must have calculated the price on the basis of the average. My upstairs neighbour, who is also in real estate while assuming an anti-gentrification posture outside work hours, claims that she warned the current owner, my landlord, that it was too expensive.

    Btw: how did you take the picture at the top of the piece?
    Btw2: why is Amsterdam not in the list?

    • I took the picture above during an apartment showing in Kreuzberg, near Hermannplatz. You can often see a crowd of people gathering in front of building’s doorway, and you know they are waiting for the arrival of the property agent. I’ve heard lots of talk recently that the numbers are so out of control that people who really want an apartment have come to offering the agencies a ‘commission’ should they be offered the apartment. I call this a bribe!

      You are quite right that I missed Amsterdam in my list. The market in Amsterdam, if I’m correct, is a little deceptive as there is social housing (with years of waiting for them) at controlled prices alongside very expensive housing in the “free zone”. On top of that there is plenty of illegal renting of these rent-controlled apartments. I wonder how the average rent costs are determined.

      Buying in Amsterdam, from browsing a few sites, seems to be 4437 EUR per square meter.

  • Pingback: A guide to renting in Berlin | Slow Travel Berlin

  • I don’t want to sound as though I’m disputing all of your numbers, but I still think that Berlin is a comparative bargain. That said, I’m kicking myself for not investing 2 years ago. My own observation is that prices have increased in my areas of interest by about 20% in that same time!

    By the numbers you provide above, buying in Berlin in the new “cool” areas is still 700-1000 cheaper its rivals. You list Stockholm, for example, as cheaper than Berlin to buy, but your source only lists a price for Sweden as a whole. In my search I can see much, much higher average prices per meter in Stockholm. (See:

    Even more to the point, to get a fuller picture we would of course have to take into account the average cost of utilities and such. And as you say, it is still cheap to go out in Berlin than many other places. So the cost of a city depends on more than just housing.

    One of the big issues I have with people who love “cheap” Berlin is the way that they expect the city to remain static. Often it seems that people are quite comfortable in wallowing in the city’s poverty. This aspect has always seemed perverse to me. As if getting control of the terrible unemployment in the city would be a bad thing.

    Also I’m not sure about this “late 19th-century bourgeois architecture” in Prenzlauer Berg, but I’ll let that slide.

  • Dear Robert,

    Thank you for the correction on Stockholm, you are quite right, I made a mistake here. Prices are more like 6000 EUR per m2 in the Swedish capital. I will correct above!

    I’m not sure what you mean by “700-1000 cheaper its rivals”? My main point is that housing in Mitte, Kreuzberg and P Berg are rapidly coming into line with other European neighbourhoods that cater to ‘Bobo’ populations. This is a remarkable evolution from where housing prices once were (I recently met someone at a party abroad who wanted to know whether it was still possible to ‘fix up a building in Prenzlauer Berg’ on a small amount of money… of course, I set her straight!). I agree, as I mention in your article, there is much more to saving money in a city than the cost of real estate, but this article is focused on the question of cheap housing.

    Finally, you are right that Prenzlauer Berg was not a bourgeois neighbourhood in the mid-late 19th C. / Gründerzeit, when the residential building spurt occurred. I meant that the apartments were taken over in the 90s by the children of bourgeois families, bringing a certain amount of that discreet charm (if you are susceptible to it) to the spaces. I will clarify above as well.

    Thanks for your comment.

    Best wishes,


  • Very interesting. I have been going to Berlin regularly for th last 6 years. Prices have increased so much, it’s inbelievable and a little scary, especially for the locals. As yuo said, 80% of Berliners are renting the place they’re living in. For those on old contracts, the rents remain cheap. The problem is for those moving. They are really struggling to find somewhere to live for the money they have.
    I invested a little in Berlin. In 2006, flats for sale were many and cheap. Not anymore. One-room apartments in interesting are now rare and expensive.
    One mustn’t forget the additional costs linked to owing an apartments, Monthly costs (heating, elctricity, water, building upkeep) are higher than other places, I think.

  • I have to say I agree with Mr. Porter. I have always found it very strange that some people oppose property prices going up. It is just a reflection of increased wealth in the city and should be welcomed by everybody.

    • The problem is that rising property prices have nothing to do with Berliners getting “richer”. The money goes to international real estate investors who are buying up buildings big time. Unemployment in Berlin remains high and wages low. Especially creative freelancers who don’t happen to work for big international companies or even places in Munich or Hamburg suffer from the ridiculous money paid for new ideas and creative work around here. Just an example: a friend with a degree in business, several years of job experience in an internet startup, with knowledge of pr and fundraising applied for a job as assistant in a pr agency. They were delighted about her business knowledge and asked if she would also help calculating the cost for pitches etc. and do some controlling. And then asked her if she would do it as a mini-job i.e. for 450,- Euro /Month. Many university graduates and young professionals – who make up this “creative avangarde” Berlin likes to brag about – face this problem. And to them, it makes a huge difference if they pay a rent of € 500,- or 700,- for their 2-Bedroom flat. Knowing this, it’s a bit strange to read these posts with people talking about prices in SF. I guess, over there people earn more in an hour than they get over here for a day’s work. Everything’s relative. But it must be nice to be a foreign investor going real estate shopping in Berlin, I guess.

  • Okay, here’s what comes up for two-bedroom apartments in my home of San Francisco right now on Craigslist, with all the decent neighborhoods selected (i.e. anything from your Mitte to your Neukölln).

    Nov 20 – Large VIEW APARTMENT available NOW!! Won’t last – $2700 / 2br – 900ft² – (noe valley) img
    Nov 19 – Showing TUES 6pm~!~23rd@Grand View~!~Downtown View & PARKING INCLUDED! – $2895 / 2br – (noe valley) pic
    Nov 19 – Bright- HARDWOOD-JChurch-NoeValley/Mission Rest &Cafes-CatOK-24 Day St – $2650 / 2br – (noe valley) pic
    Nov 18 – DOWNTOWN & BRIDGE VIEW & PARKING INCLUDED!***Showing TUESDAY 6:00*** – $2895 / 2br – (noe valley) pic
    Nov 17 – $2695 Outstanding 2BR/2BA Luxurious Apartment – $2695 / 2br – (castro / upper market) pic
    Nov 17 – Showing TUESDAY 6:00pm ~!~ USEFUL space w/VIEW & PARKING! – $2895 / 2br – (noe valley) pic
    Nov 15 – LIGHT & BRIGHT IN NOE VALLEY!!! – $2695 / 2br – (noe valley) pic
    Nov 15 – Charming Two Bedroom with a View – $2900 / 2br – (potrero hill) pic

    For reference, 2900 US dollars currently converts to 2251€.

    And you said yourself that Paris and London are like three times as expensive. Berlin is still cheap as hell apparently.

    • Yes, agreed. Berliners compare today’s rents to what rents used to be like and feel prices have exploded. Of course, compared to SFC, Berlin is a dream. The trickiest thing here is actually finding a place that meets expectations (often very high in Berlin), since there’s so much demand.

  • Is it still worth buying an apartment in Berlin as an investment and renting it out? What sort of net return could I expect?

    • That’s a hard one. Some people say that property values are plateau-ing. But that might not be in the case in certain areas like Kreuzberg where property values have skyrocketed in the last couple years. Rents in Berlin are flexibly controlled under a Mietspiegel (a roster of what you should charge for rent), so you may not be able to make as much as you expect if you intend to rent out. Also, once in the apartment, it’s very hard to get rid of renters (this is great from a renter’s point of view! which is one reason why most people rent in Berlin), or raise the rent as much as you like over time in relation to inflation. If there’s a real rise in inflation (although the Germans will do their best to avoid this historical bugbear), it might be harder to sell the apartment too, meaning a problem in liquidity. All this is very speculative, who knows what will happen. I know this is not an answer to your question, but I hope it gives you some direction.

  • I was one of the people who had a cheap apartment in East Berlin in the 90s, I paid just 200 DM as it was then, ie 100 Euros a month. Coming from London I couldn’t believe it. Prices slowly went up, but it was still very cheap.

    I wonder whether this current immobilien boom in the prices of owner occupied apartments is going to be sustainable. Berlin doesn’t have a strong economy to fuel that kind of price level. Much of the buying power comes from people from other countries like UK who are used to higher prices and who like to buy property. Native Berliners arent so keen. This isn’t going to help increase prices in the long run.

    When I lived in Prenzlauer Berg in the 90s, the housing association wanted to sell our block to the tenants. Everyone however had to agree to buy, otherwise they wouldnt sell the building.

    The association held a meeting to discuss it with the tenants, but all they wanted to know about was what would happen to their rents. Not one person was interested in buying their apartment, not even with a discount.

    Its possible that the situation has changed now, maybe they have since sold off some of the apartments after all, or sold the whole building to a new rental company.

    Its interesting to see the photo of the types waiting to view the apartment: mostly white young westerners who want to live amongst the grafitti strewn streets because it’s “edgy”.

    As for renting any apartment where such a mass viewing was arranged. I just wouldnt put myself through that sort of thing. Its too demeaning.

  • The problem with all of these numbers is that they are not taking earning power, cost of living, unemployment, etc. into account. Apartments in Berlin seem cheap, but other costs are high, wages are low, and unemployment is very high.

  • Thanks for the post – I enjoyed a few days in Berlin in January, fell in love with the city, and was interested in taking a contract there for 12 months. I may still do it, but I’m amazed at how expensive it is in reality compared to what my expectations were.

    I’m in a box room in North London at the moment, paying over €2000/month before taxes. It’s ok but I want a change. My preferences were Berlin or back to Dublin.

    Due to the property price collapse, you can rent a brand new studio apartment in Dublin for 900 euro including parking space, and there’s plenty of well-paid work in companies like Google, Twitter or Facebook, especially if you have a bit of IT and language skills. Your description of looking for an apartment in Berlin sounds horrendous – in Dublin, frankly, it’s all based on the interview and the personal relationship you have with the landlord, in my experience.

    Having said that, I do wonder whether I’d regret not spending a year in Berlin, if I could make it financially possible at all.

  • Interesting, but entirely inevitable. It’s because of all these cool young professionals moving in that the rents go up!

  • Joseph, I think the real challenge is how fast will we come up with new housing. Everybody agrees that the demand is high, and will stay high. We Berliners know how attractive our city is. And understand and know that we will get more people. Rents are raising, but still in most districts it doesnt make sence to build new housing. The cost for new construction is currently between 1600-1800 Euro, now ad sidecosts and the plot (!), and you see that you will need 9€ or more to refinance the investment. Even the public cooperatives owned by the municipality of Berlin admit that they need 8,5€/ month to cover costs (!). This means no return for a normal investor. but we need more and better housing, and this most people dont get at all, we not only have a lack of housing, but a lack of quality housing. I am talking about homes for elder people, e.g. with a lift. BTW your Guide to moving to Berlin post inspired me to write this post: its more the landlords perspective but maybe it helps.

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