The Lure of Berlin

Just a few years ago, house owners in many districts of Berlin had to bend over backwards to find new tenants. Not so today, as things have changed for the better. An acquaintance told me the other day with frustration that she had applied for a small studio apartment on Kurfürstendamm only to be told by the landlord she was one of 50 candidates for this flat.

“Berlin draws young people like a magnet. Elsewhere in the republic, the city has a reputation of being a dynamic, creative and affordable metropolis. That is why more people live in Berlin today than at any other time since 1995,” the local daily Berlin Morgenpost reported recently.
Indeed, Berlin’s population is 3,468,900 at the moment. During the first quarter of the year alone, 35,700 people moved to the city. This is more than twice as much as the in-bound migration during the same period in 2010 – which was 16,800. And in Q1 2009, the figure was just 11,000.
This is a trend reversal since the mid-1990s when many people had left the capital. In the year 2000, the population of Berlin hit its lowest level at 3.38 million. Meanwhile, though, a new dynamic trend has taken root. The number of people moving to Berlin has been steadily increasing, as has the birth rate in recent years.
Many young people come to Berlin to obtain a degree. “Student applications for the winter semester,” read the Berliner Morgenpost, “hit a new all-time high, just like last year, according to the universities and university colleges. The University of Applied Sciences, for one, reported that in some cases, demand surged by ten percent.” Berlin’S higher education institutions have responded to the surge in demand by expanding their capacities. By 2012, campuses are supposed to be able to admit another 6,000 students.
Not just students are moving to Berlin, but young people, too, who are looking for career opportunities in the creative sector. According to stats released by the chamber of commerce, this sector, which accounts for around 27,000 small and medium-sized companies in the German capital, generates annual sales of just under 22 billion Euros – that is, 16 percent of the total turnover of Berlin’s economy.

That many young people are moving to Berlin is one of the reasons why the number of households – at least those relevant for the housing market – is rising faster than the number of residents. The BBU Association of Housing Entrepreneurs in Berlin and Brandenburg reported that the number of households rose by nearly 100,000 between 2005 and 2010. During the same period, only 3,100 new apartments were raised. Berlin’s Senate predicts that the number of households will increase by 130,000 before the year 2020. Yet given the fact that housing construction in Berlin remains negligible, it is safe to expect vacancy rates to decline and rent rates to rise.

Notwithstanding the surge in rent rates, housing in Berlin remains far more affordable than in other cities – such as Hamburg, Munich or Frankfurt. Young people relocating to Berlin from one of these cities find a comparatively relaxed and low-priced housing market, and appreciate the fact that they have to spend much less on monthly rents than they would have to in their hometowns.