MARKET INSIGHT
Berlin: Europe’s most secure property market with an unrivalled sweetener for investors
January 15, 2026 • Author: George Radford
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If you haven’t been to Berlin, you should. It remains one of the most exciting and atmospheric European cities to visit. If anything, a visit will help you understand why it’s one of the fastest growing capital cities in the EU; 4 million inhabitants by 2040, demonstrating a population growth of 10% during the decade 2014-2024.
Berlin’s economic pull is colossal. It has one of the lowest unemployment rates in the EU whilst having the largest and most diversified economy - only China and the US have larger GDPs. As such, it packs a colossal punch. Its economic strength and stability mean Berlin has steady house price growth, strong rental yields - particularly for new build – which positions it as a safe haven location for property investors with medium to long-term goals.
RPA’s top 10 reasons to invest in Berlin
1
Europe’s largest economy behind it
Berlin sits within Germany, Europe’s largest economy by GDP; a whopping $5.01 trillion in 2025. This provides macro stability, deep capital markets and strong legal protections that many global cities cannot match.
2
Structural housing undersupply
Berlin officially needs 222,000 new homes by 2040, yet permits fell sharply in 2024 by 40.6% (JLL) meaning future delivery will lag demand. This underpins long-term rent and price pressure. In the first half of 2025, house prices demonstrated moderate growth and Berlin continues to be the best performing city in Germany (JLL’s Germany’s Big Cities Report). JLL estimate a price growth across the city of 3-3.5% in 2026. Prices are already 18% above 2020 levels.
““Berlin represents a market for investors seeking sustainable returns with proven long-term appreciation potential.””
3
Strong population growth
Berlin’s population is approaching 3.9 million, driven by domestic and international migration. Demand is driven by jobs, students and global talent, not speculative buyers which makes a critical difference to the stability of its property market. By 2040 its population will have tipped 4 million. You can’t make money in a place where no-one wants to live and on current evidence, Berlin can’t house its growing population quickly enough.
4
New builds enjoy regulatory advantages
New-build homes are largely exempt from Germany’s rent-brake rules, giving investors pricing flexibility that older stock does not enjoy, a major differentiator versus cities like Paris or Amsterdam. Also new build condos are showing to hold their values better than secondary market stock and in some cases can command a 37% premium over overall asking prices, reflecting strong demand for modern, high-quality stock. Investors see pricing power in product design and location with four neighbourhoods repeatedly showing strong growth: Charlottenburg-Wilmersdorf, Pankow, Friedrichshain-Kreuzberg and Mitte (CBRE).
5
Rental growth has outpaced many European peers
Berlin asking rents have risen by 50% since 2019, one of the strongest growth rates among major European cities, while still remaining below London and Paris in absolute terms. Investors should take note that this means there is still plenty of room for growth. Berlin average asking rent increased by 12% between 2024-2025 and conservative estimates forecast new build rents to increase by 2.5% - 4.5% p.a. over the next 5-10 years (Berlin Hyp, CBRE)
6
No Capital Gains Tax on 10-year holds
Berlin offers investors NO capital gains tax on apartments sold after 10 years of ownership, a major draw that no other European capital offers. CGT is 0% after 10 years, it applies to all private individuals, regardless of residency and remains one of the clearest and strongest regimes in Europe. This is why Berlin is so attractive for long-term capital growth investors. There are other European cities - Brussels and Rome - that offer 0% CGT but on shorter periods of five years. Berlin really is the best on this front.
7
Price levels still lag global gateway cities
Despite rapid growth, new-build prices remain materially below London, Paris, Amsterdam, Zurich and many US gateway cities, offering relative value and convergence potential. On average Berlin is 15-20% cheaper per sqm than Paris and 10-15% cheaper than London. This pricing advantage along with the city’s strong demand fundamentals can translate into higher net yields and capture potential growth over time.
8
Institutional capital validation
Berlin is a core “Living” market for European pension funds, insurers and asset managers - signalling long-term confidence rather than short-term speculation. Over the last decade, investment into German multifamily (residential) property has averaged about €18 billion per year, outpacing major European markets such as the U.K. (€10 billion). A recent Savills report shows that in Germany around 39% of institutional investment volume (insurance companies, pension funds, open-ended funds) in 2023 was in development projects and newer buildings, i.e., the unregulated new-build segment that investors prefer because it avoids some older rent controls. This demonstrates a clear institutional preference for new-build residential assets. Research indicates that up to €40 billion of housing assets in Berlin were held by institutional investors at one point, making it among the largest concentrations of institutional residential ownership in Europe, evidence that large funds and institutional portfolios are active here.
9
Diversified, resilient employment base
Berlin combines government, healthcare, education, technology, media and fintech, reducing reliance on any single industry and supporting stable tenant demand. No single sector exceeds 16% of the employment total, therefore giving Berlin a diversified and resilient employment base, not reliable upon any one industry. By company count, Berlin is ranked Europe’s #2 Fintech hub, behind London. And investors should note that public sector, healthcare and education combined account for 35–40% of all jobs in Berlin. These sectors are low-cyclicality employers, meaning employment remains stable even during economic downturns. This is a major reason Berlin’s rental market has historically shown lower vacancy volatility than more finance or tourism-led cities.
10
High-quality tenant profile
New-build stock attracts professionals, international workers and long-term renters, supporting lower voids, lower maintenance risk and more predictable income. Berlin’s long-term tenancy culture means there is lower tenant churn and fewer vacancy periods, reducing overheads for landlords. Large population growth, inward migration, student influx and stable labour markets mean a reduced time on the market for well-priced units, particularly those near transport connections, universities and high-amenity popular residential districts.
The top places to invest in Berlin
According to research by CBRE, Guthmann and JLL there is a consensus on the top four districts demonstrating the most potential for growth:
““Centrality alone no longer determines price development. Year-on-year prices are rising in Pankow and Friedrichshain.””
In Conclusion
Berlin property market trends indicate there is plenty of growth to come in the Berlin market in terms of rental yields and property prices. Berlin’s jobs market is thriving, its universities regularly rank amongst the top in the world and it is the capital city of the third largest economy in the world. These factors will continue to attract professionals to Berlin, whilst also providing the ideal tenant pool for property investors. New build condos present the most advantageous property type for investments and with 0% CGT after 10 years of ownership Berlin certainly knows how to sweeten the deal.
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About the author
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
Founder & Managing Director
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