Investment Property in Berlin

Michael Pauker · 2026-10-13

You are considering buying a tenanted apartment, and Berlin is on your shortlist. Understandably so. Few German cities have such low vacancy rates, so many people moving in and so many people looking for a home.

At the same time, no other city has so many rules for landlords. Rent controls, a reduced cap on rent increases, restrictions on conversion into individually owned apartments and 82 social conservation areas all apply here simultaneously. On top of this, purchase prices are high relative to the rent you are allowed to charge.

We therefore take a clear-eyed approach. We show you the official figures and their reference dates, prices by borough and an apartment for which we have calculated the figures before and after tax.

01Berlin in figures

The key data at a glance, each with its source and reference date. There are two official population figures. The population estimate based on the 2022 Census gives 3,70 million. The population register counts everyone registered as resident and records 3,91 million. We use the population estimate as the headline figure and the register when discussing trends and boroughs.

02Population & demand

Berlin is growing, but more slowly than before. According to the official population estimate, the city gained 15.312 residents in 2025, an increase of 0,4 %. Growth comes entirely from people moving in. For four years, deaths in Berlin have outnumbered births.

Over ten years, the number of registered residents has risen by just over 300.000. Looking ahead, the Senate's central scenario projects around 4,0 million residents in 2040. That is an increase of 2,8 % compared with 2024, a much slower rate than in the past decade. A forecast is not a guarantee. It depends primarily on immigration from abroad.

For landlords, the number of households matters as well as the number of people. Every second Berlin household consists of one person; in Friedrichshain-Kreuzberg the figure is 59,2 %. Small apartments with one or two rooms are therefore particularly sought after. They account for 54 % of all apartment sales.

Housebuilding is barely keeping pace with demand. In 2025, the net addition was 10.766 homes, an increase of 0,5 %. Building permits reached a low of 9.772 homes in 2024 before rising again to 14.079 in 2025. For you, this means that, based on current data, the risk of a standard rental apartment remaining empty for a long time is low in Berlin. It is never zero.

03Economy & labour market

Here, Berlin presents two contrasting pictures. The unemployment rate was 10,4 % in September 2026, well above the national average. It had risen slightly year on year. Differences between boroughs are substantial: in October 2025, Neukölln reported 15,1 % and Mitte 12,3 %.

At the same time, Berlin has 1,68 million employees subject to social security contributions, although the figure for 2025 was 0,2 % lower than the previous year. Every day, around 178.000 more people commute into the city than out of it. Many come from Brandenburg.

The largest employers are public or semi-public organisations. At the end of 2025, Deutsche Bahn employed 26.894 people in Berlin, Charité 25.256, Vivantes 20.649 and BVG 16.800. Healthcare, transport, public administration and research underpin the city. These sectors are less sensitive to the economic cycle than industry, but they are not engines of growth either.

Around 206.500 students were enrolled at the 49 higher education institutions in the winter semester 2025/26, 2,8 % more than a year earlier. They provide an additional source of demand for small apartments. Often, they can only afford the rent with parental support.

04Rents, purchase prices and rental yields

There is no single rent figure for Berlin. There are three very different figures, and what matters for your calculations is which one applies to your apartment.

Asking rents are more than twice the rent index figure. Reasons include furnished temporary accommodation, new builds and exemptions from rent controls. If you buy an apartment with an existing tenancy agreement, the lower figure usually applies to you.

For purchase prices, the valuation committee analysed all notarised sales in 2025. An individually owned apartment cost an average of 5.511 €/m², and a new build on its first sale 8.108 €/m². Former rental apartments converted into individually owned units averaged 4.928 €/m².

One detail is particularly important for investors. Apartments in older buildings constructed up to 1919 sold in 2025 for an average of 4.017 €/m² when tenanted, compared with 5.833 €/m² with vacant possession. The discount for an existing tenancy agreement is therefore around 31 %. It reflects the fact that you can only adjust the rent within narrow limits.

Purchase price and rent produce two indicators. The purchase price multiplier tells you how many years' rent you are paying for the apartment. The gross rental yield is the annual rent divided by the purchase price, before costs and taxes. The following values are our own calculations based on the official figures.

For comparison, our worked example assumes 3,8 % for a loan with a ten-year fixed interest rate. In no segment does the gross rental yield reach that interest rate. Buyers in Berlin therefore rely less on an ongoing surplus and more on principal repayment, tax effects and long-term rent growth. No one can guarantee how these figures will develop. You can assess your own apartment using the rental yield calculator.

What is your apartment's rental yield? Enter the purchase price, acquisition costs and rent; the calculator shows gross and net rental yields.

05Borough overview

Berlin has twelve boroughs, each with around 260.000 to 430.000 residents and each the size of a major city in its own right. We present eight of them using official figures. Purchase prices come from the valuation committee and relate to the former boroughs before the 2001 reform, which is why some boroughs have several values.

Population: register, 31.12.2025. Asking rent: IBB/VALUE, median of listings. Purchase price: valuation committee, average after removing 10 % outliers. Unemployment rates: October 2025.

The right location for you depends on your goal. In inner-city boroughs, you pay high prices for high advertised rents, which you often cannot achieve with a tenanted apartment. In Spandau or Marzahn-Hellersdorf, prices are lower, but so are rents. A location is not automatically better because it is better known.

06Rules for landlords in Berlin

Berlin uses almost every instrument that federal law makes available to the states. For your calculations, these rules matter more than the location.

What does that mean in practice? Your rent is guided by the rent index. For an apartment in a rent index category with a figure of 7,08 €/m², you may charge no more than around 7,79 €/m² on a new letting unless an exemption applies. Furnished temporary letting in social conservation areas is now only possible with permission.

Conversion restrictions affect the market. In 2021, 28.783 apartments were converted; in 2024, only 1.552, and in 2025, 966 according to the valuation committee. Very few new individually owned apartments are therefore being created within the existing housing stock. This limits the supply of apartments investors can buy.

When buying in Berlin, you pay 6,0 % property transfer tax. Notary and land registry fees add around 1,5 to 1,8 % (notary costs in detail), plus an estate agent where applicable. With an agent, your acquisition costs can quickly reach around 11 % of the purchase price. The acquisition costs calculator shows your own figure.

07Worked example: a tenanted apartment in Berlin

Take Lena. She buys a tenanted apartment of 60 m² in a building from the 1960s, in an average residential location in the inner city. The purchase price matches the average established by the valuation committee for such apartments in 2025: 4.031 €/m², or around 242.000 €. The tenant pays exactly the average rent index figure for this category, 7,08 €/m² or 424,80 € per month. The name is fictional; the figures are a worked example, not a forecast.

Lena pays acquisition costs of around 27.400 € from savings: 14.520 € property transfer tax, around 4.200 € for the notary and land registry, and 8.639 € estate agent commission (assumed at 3,57 %). She finances the full purchase price through a bank, at 3,8 % interest and 1,5 % principal repayment (assumed). Whether a bank would offer this financing depends on her creditworthiness.

In the first year, Lena therefore contributes around 737 € per month before receiving any tax refund. After tax, the figure is around 425 €. At 60.000 € taxable income it would be 480 €, and at 100.000 € around 412 €. Our guide to tax on rental income explains how rental income is treated for tax purposes.

Even after removing principal repayment from the calculation, Lena still contributes around 117 € per month from her income after tax. In this example, the apartment therefore does not cover its costs even without principal repayment. For tenanted existing apartments in Berlin charging rent index rents, this is the rule rather than the exception.

What would change the picture? A larger equity contribution reduces interest costs. A rent increase is only possible up to the upper end of the rent index category, here 9,25 €/m², and only with justification and subject to the rent increase cap. A change of tenant allows no more than around 7,79 €/m² because of rent controls. The purchase price is the biggest lever.

For comparison: a new-build apartment in Berlin

What would Lena's figures look like for a newly built apartment? We use the same person with the same income, interest rate and principal repayment rate. The apartment measures 45 m² and costs the average price established by the valuation committee in 2025 for first sales in newly built residential developments: 8.108 €/m², or 364.860 €. For rent, we use the median advertised rent for new-build apartments, 19,97 €/m² or 898,65 € per month. Whether a particular apartment achieves this rent depends on its location and specification.

Before tax, Lena contributes around 788 € per month for the new-build apartment; after tax, around 167 €, with 464 € going towards principal repayment. The main difference is depreciation: at 13.673 € in the first year, it is more than three times as high as for the existing apartment, but it falls each year because the 5 % is always calculated on the remaining value. We allow less for maintenance, but the price per square metre is around twice that of the existing apartment. At 2,96 %, the gross rental yield is above Lena's existing apartment at the rent index level (2,11 %), but below existing apartments at asking rents (3,17 %). The higher rent is only possible because apartments first used and let after 01.10.2014 are permanently exempt from rent controls (§ 556f BGB).

08Opportunities and risks

Berlin is a market with clear strengths and clear limitations. Both should inform your decision.

What speaks in Berlin's favour:

• Demand: Vacancy of 1,97 % in the 2022 Census, with more than half available for occupation within three months. Growth driven by inward migration, with a slight increase forecast up to 2040.
• Large market: 18.303 sales of individually owned residential and non-residential units in 2025. The market is large. Whether a sale succeeds, and at what price, still depends on timing, condition and the tenancy agreement.
• Limited new supply: Very few conversions and little new construction relative to demand.
• Tenanted-property discount: Buyers of tenanted apartments pay significantly less per square metre than for apartments with vacant possession.

What counts against it:

• Low yields: Gross yields of around 1,7 to 3,2 % depending on the segment, below current borrowing rates.
• Regulation: Rent controls, a rent increase cap of 15 %, social conservation protection and restrictions on changes of use limit rents and use.
• Political risk: The 2020 rent freeze, the 2026 public ownership law and a new government after the 2026 election. Further rules are possible.
• Interest and maintenance: If interest rates rise when refinancing, the monthly contribution increases. Older buildings need reserves, and special levies are possible.
• Labour market: Unemployment of 10,4 %, significantly higher in some boroughs. Rental losses can never be ruled out.

Read more about the general advantages and disadvantages in our guide to apartments as investments.

09Other locations

Nearby: Brandenburg

All locations compared: Where is investment property worthwhile? Cities compared in 2026 · Which federal state is suitable? All 16 compared

10Further reading

• Apartments as investments: advantages and disadvantages
• Tax on rental income
• Notary costs when buying a home
• Property transfer tax in Berlin
• Rental yield calculator
• Acquisition costs calculator

11Sources

All sources accessed on 13.10.2026.

• Berlin-Brandenburg Statistics Office: Population estimate 2025 (01.10.2026), Population register statistics 30.06.2026, Population register statistics 31.12.2015, Housing stock 2025, Single-person households 2025 (microcensus), Employees subject to social security contributions 30.06.2025, Students, winter semester 2025/26
• Senate Department for Urban Development, Building and Housing: Population forecast 2024–2040, Berlin rent index 2026 (28.05.2026) and documentation, Property market 2025 (31.07.2026), Temporary accommodation in social conservation areas (17.04.2026), Siemensstadt Square
• Berlin Committee of Valuation Experts for Property Values: Property Market Report 2025/2026, Chapter 5.5
• Berlin Senate Chancellery: Rent controls extended until 2029 and Conversion ordinance under § 250 BauGB (both 11.11.2025)
• Berlin Rent Increase Cap Ordinance, GVBl. 2023 S. 112; Berlin property transfer tax, Act of 20.12.2006 as amended on 14.11.2013
• Mitte Borough Office: Unauthorised changes of residential use
• Berlin House of Representatives: Parliamentary paper 19/20607, vacant housing (2022 Census, response dated 30.10.2024)
• Investitionsbank Berlin: IBB Housing Market Report 2025, summary and tables (06.03.2026)
• Federal Employment Agency, Berlin-Brandenburg Regional Directorate, labour market September 2026 (reported on 30.09.2026)
• Berlin Partner / Business Location Center: Berlin's top 200 employers (as at 31.12.2025)
• Federal Statistical Office: 2022 Census, nationwide vacancy
• Federal Constitutional Court, decision of 25.03.2021, 2 BvF 1/20 (rent freeze)
• Berlin State Returning Officer: Results of the 2026 House of Representatives election
• § 7 Abs. 5a EStG (declining-balance depreciation), § 7b EStG (special depreciation) and Federal Ministry of Finance circular dated 21.05.2025 on § 7b, § 32a EStG (2026 tax schedule), § 556f BGB (new-build exemption from rent controls)
• All yield calculations and worked examples: our calculations, as at 13.10.2026

Note: This page provides general information and does not constitute investment, tax or legal advice. All figures are illustrative calculations with disclosed assumptions, as at 13.10.2026.