Berlin’s performance is on a par with Munich plus Hamburg plus Frankfurt am Main plus Düsseldorf plus Stuttgart. To be precise: Berlin actually outperforms all of these cities combined. While obviously not true in terms of economic power, it is definitely the case in regard to apartment building sales. The Rental Housing Market Report 2012, which the Center for Real Estate Studies compiled on behalf of the IVD Federal Investment and Asset Management Association, suggests as much.
Here are the stats: In 2011, rental housing sales in Berlin added up to 3.9 billion euros. The combined sales of all other cities mentioned, by contrast, barely cleared the mark of 3.7 billion euros. Even in the City of Munich, which takes second place after Berlin, rental housing sales generate barely one fourth of the turnover volume as in the nation’s capital.
Year on year, the sales volume in Berlin rose by 29 percent, thereby surpassing even the banner year of 2007 when sales topped 3.6 billion euros. The number of transactions in Berlin rose by 17 percent year on year, from 1611 to 1887.
The following figure tells you just how important the rental housing market is for the city’s real estate market as a whole: The share of rental housing sales in the total real estate sales equalled 57 percent in Berlin, the remaining share of sales breaking down into office, retail, hotel and other types of use. In Hamburg, by contrast, the share of the rental housing market in the overall real estate market was a mere 21 percent, and just 25 percent in Munich.
In fact, the number of apartment buildings sold in Munich is negligible because the market is swept clean. The following comparison suggests as much: While apartment buildings in Munich sell at a rate of one house every other day, five houses change hands on a daily basis in Berlin.
For real estate investors, these figures are important because they demonstrate that Berlin is by far the most liquid rental housing market in Germany. Which hardly comes as a surprise, because players from all walks of life buy and sell in Berlin:
- Investors from elsewhere in Germany
- Foreign HNWIs
- Foreign institutional investors
- Private buyers
- German insurance companies, lately
- Closed-end real estate funds
Naturally, you will find attractive real estate investments in other cities, too, and they may even come with higher yield opportunities than in Berlin. This is particularly true for so-called Grade B cities, which can by all means be a viable alternative. But the liquidity of the market, and the diversity of buyers is nowhere higher than in Berlin. And real estate buyers will appreciate the fact when the time comes to resell their property, at the latest. All of the above-listed groups will qualify as leads.