Why Berlin is set for strong growth

None of the population growth forecasts put together over the last few years are now even worth the paper they are printed on. Without exception, they are based on the assumption that net migration to Germany would amount to 100,000 to 200,000 people per year. Over the last few months, more people have been arriving in Germany each month than these forecasts allowed for in a whole year.

Berlin‘s Senate Department for the Environment and Urban Development is finally reacting. It knows that the figures it has been working with are in sore need of revision. On the Senate‘s website the following explanation has been published: “Berlin is currently undergoing extremely dynamic population growth. Between 2011 and 2014, around 175,000 new Berliners made the city their home.” This exceeds even the upper range of the upper (i. e. maximum) forecast scenario that was produced in 2011. Given the rapid influx of refugees, the Senate now says that these “old” forecasts (from the year 2011) for the population of Berlin and its districts between 2015 and 2030 are unusable.

“There was no way of predicting mass migration to Berlin on this scale back in 2011, which means that we now have to develop a smaller-scale forecast. This is currently being developed,” is the comment on the Senate‘s website. The new forecasts will – just like the “old” ones – present three variations for the future development of the city‘s population.
I am very curious to find out what these forecasts eventually look like.

Nobody knows how total migration across Germany will ultimately develop because at the moment nobody knows whether, or to what extent, politicians will be willing or able to solve the current problems. But one thing is already clear: Germany‘s population is not going to shrink in the way predicted again and again by demographic analysts over the last few decades.

And although, for example, there are plenty of vacant apartments in Germany‘s eastern states and rural regions, enough in fact to house a large proportion of the refugees currently arriving in the country, it is unlikely that these refugees actually want to settle in such regions. Experience demonstrates that migrants and refugees, understandably enough, want to settle in areas in which their countrymen and women have already established communities – so more likely in Berlin than in Lower Saxony or Mecklenburg-Vorpommern.

Germany‘s population is not going to shrink in the way predicted by demographic analysts over the years.

To some extent I am skeptical with regard to the social and political consequences of the current wave of mass migration. But for real estate owners and investors, particularly those in the housing sector, the news is good as demand for housing is set to develop more dynamically than was previously assumed in real estate market forecasts. And this means that we are in for an extended period of both rising rents and property prices – not only, but especially in Berlin.