Why You Should Stay Away From Berlin Real Estate Investments
The author of this blog, Alexander K. Korte, has worked in Berlin real estate for 30 years. His advice today: do not buy investment properties in Berlin.
Yes, there are still some buyers, and banks report that foreigners are entering the market again. But in my view, many of them are not fully aware of the market dynamics or the political landscape they are stepping into.
The fundamentals look weak. While supply is low and housing demand is real, prices remain extremely high compared to achievable rents. Regulations are strong, exit strategies limited, and political rent caps continue to resurface. Approvals take too long. Skilled workers are scarce, making renovations both costly and slow.
Foreign investors in particular underestimate how tenant-friendly the legal system is in Germany. Landlords carry most of the risk, with limited upside.
On a national level, the picture is not much better: political risk, demographic stagnation, weak yields relative to risk, and very limited tax advantages.
My clear recommendation: if you buy, buy for self-use. If you can rent, stay a renter. Do not buy an investment property in Berlin now. Go Bitcoin instead. (No, this site is not hacked.)