Berlin – our capital and a global metropolis that attracts millions of people every year, not just for a short trip, but to live. The population will be around 3.871 million in 2025. Its diverse offering, which ranges from gastronomy to art and culture to countless leisure activities, has something to suit every taste. The city is internationally renowned for its food, travel and music and is one of the world’s top destinations. However, it is not only in this respect that Berlin plays a leading role, but also when it comes to rental prices.
Most people are probably aware that finding accommodation in Berlin is anything but easy for tenants. It is equally unsurprising that steadily rising prices play a major role in this. Unfortunately, the situation is not easing this year either – on the contrary: rents are continuing to climb. Property buyers, on the other hand, can breathe a sigh of relief, as purchase prices remain largely stable and are at the same level as last year. New contract rents, on the other hand, have risen by around 4.7 percent.
The new figures from the IW Housing Index for the fourth quarter of 2024
The new housing index from the German Economic Institute (IW), which was published on Monday, February 3, shows that rents in Berlin (8.5 percent), Essen (8.2 percent) and Frankfurt (8.0 percent) in particular have risen sharply. Prices also rose significantly in Leipzig (7.3%) and Düsseldorf (7.2%). The reason for the rising prices is the general housing shortage in cities and sought-after regions. In 2024, only 260,000 new apartments were completed, and by 2025 this figure could be as low as 230,000 – figures that are significantly below actual demand.
In short: “Tenants are paying for the housing shortage!” says IW real estate expert Pekka Sagner. According to him, housing could increasingly become a luxury good. The IW is forecasting a further rise in residential real estate prices in 2025 due to continued high interest rates and rising incomes, which are linked to the shortage of skilled workers in certain sectors.