Berlin investment tipped to spark property boom

Berlin has seen huge multi-billion pound investments in property from UK and European investment banks such as Terra Firma, attracted by low costs start up costs and commercial office space which is cheaper than in Munich and Frankfurt. In addition, leading multinationals such as Sony and DaimlerChrysler have set up headquarters in the city.
This investment has kick-started property market growth - 2006 saw a 0.2% rise in prices after losses in the previous year, while the economy as a whole expanded by 2.5%, the fastest growth since 2000, and looks set to increase by a further 2.5% in 2007. However, just 14% of people currently own their own properties.

Stuart Law, chief executive of Assetz, commented: “It is a unique situation to have property prices in a capital, as they are in Berlin, which are half those of the surrounding cities of Munich and Frankfurt. With economic conditions remaining favourable, it is inevitable that the Berlin market will catch up, as the UK-led phenomenon of buying your own home continues to spread rapidly across Europe.”

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