Yves Quarter
Berlin, Germany

Robust population growth continues to fuel a strong rental market

The city’s modern, green, affordable, and vibrant metropolis has attracted an average of 19,500 newcomers per year over the last two decades, a trend that is expected to continue for the foreseeable future. By 2040, Berlin’s population is estimated to have exceeded 4.1 million people, although a huge boost for the economy, will put immense pressure on the already undersupplied housing stock.

The diverse and resilient economy underpins its reputation as a leading city for economic growth

Over the last two decades, Berlin’s economy has shown to be more recession-resistant than most European cities. Between 2005 and 2009, Berlin’s economic growth doubled that of Germany as a whole and more recently, with the COVID-19 pandemic, the city once again proved its economic persistence. Between 2019 and 2022, Berlin’s GDP increased by 13.17% compared to other cities such as Frankfurt (+10.16%) and London (+12.51%).

Berlin’s undersupplied housing market shows great investment prospects

While Berlin's population continues to grow, its housing supply has lagged. Berlin's population has increased by almost 430,000 since 2000, requiring around 242,555 additional housing units, although less than 200,000 flats have been refurbished or built during this period. Considering the projected housing demand and assuming that house completions would remain at their 10-year average, an undersupply of over 87,000 units is likely to exist by 2040. As demand continues to rise and supply levels struggled to keep up, Berlin's vacancy rate has gradually fallen from 3.5% in 2011 to less than 1% today.