The UK’s decision to leave the European Union, for example, has given Berlin a boost, according to Blum: “People in London were waiting to see what would happen but now that we are talking about a hard Brexit [where the UK is set to leave the single market as well as the EU] it looks like lots of companies may move to Berlin, unless Britain decides to put really low taxes.”
This combination of spectacular economic growth and political stability has also contributed to fuel the local real estate market, with the German capital acquiring a reputation as a safe haven. “Berlin has become the ‘go-to’ investment destination because, on the one hand, it is a very safe environment in Europe’s most economically successful country, and, on the other hand, you have very dynamic real-estate trends,” says Fischer.
“Three years ago, five years ago, it would have been impossible to find buyers for Berlin property in New York or Hong Kong. However, the political events of the last 12 months, be it Brexit, be it the Trump vote, which nobody really anticipated, have really put the city on the map.”
The question, counters Fischer, is how quickly you can enable developers to build on those spaces. “Although people perceive Germans to be very organised and efficient, this is not the case when it comes to [building permits]. We need about 35,000 apartments every year and the planning authorities are lagging behind the high demand that we have.”
That said, this opportunity to build more housing is one of the reasons that leads both Blum and Fischer to believe the Berlin market is sustainable in the long-term. Another is the country’s solid approach to lending: “German banks have given healthy loans to property owners so we won’t see in the future something like a weird credit crunch,” says Blum. “The whole market is invested on a very healthy credit base.”