Berlin

Berlin’s housing market in 2025 is defined by high demand, supply shortages, and fast-rising prices. Around 85% of Berlin’s population are renters, with only about 15% owning their homes, which is a much higher renting rate than most European capitals. Median asking rents have surged to about 16 euros per square meter citywide, with existing tenants in state-owned housing often paying less than 7.50 euros per square meter. Median prices to purchase an apartment are roughly 5,140 euros per square meter for existing stock and about 8,390 euros per square meter for new construction. The city is experiencing vacancy rates below 1% and new construction has failed to keep pace with demand, driving both rents and prices upward.

Publicly owned housing plays a major stabilizing role, accounting for roughly 15–18% of the rental market. These homes are managed by municipal housing companies and are often considerably cheaper than private rentals. In Berlin, public housing and social housing are not identical. Public housing refers to apartments run by municipal companies and available to broad segments of the population at regulated prices. Social housing specifically means homes that received public subsidies for construction and are required to maintain affordable rents for a set period, often with strict tenant income limits. Social housing stock is shrinking as older subsidized units lose their special status, whereas public housing remains a distinct, sizable sector.

Berlin faces a severe housing crisis characterized by dramatic supply shortages and rapidly escalating costs that disproportionately affect vulnerable populations. The city's homelessness has exploded from 26,000 people in 2022 to 53,600 in 2025, with projections reaching 85,600 by 2029 without intervention. When including those in refugee centers, the homeless population could reach 115,000 by 2029.

The supply-demand imbalance is stark. Berlin needs approximately 20 housing units per 10,000 inhabitants according to JLL analysis, but only 25 building permits per 10,000 inhabitants were issued in 2024. Building permits collapsed by 38.5 percent in 2024, continuing an eight-year decline. Despite population growth of 312,000 between 2013-2023, construction has lagged severely behind demand.

Market dynamics favor existing tenants while penalizing newcomers and mobile residents. The gap between existing rents under 9 euros per square meter and new contract rents averaging 15.79 euros creates extreme inequality. This dual-tier system particularly impacts young professionals, immigrants, and anyone seeking to relocate within the city.

The crisis extends beyond homelessness to affect middle-income residents facing unaffordable housing costs. With asking rent increases of 12.5 percent in 2024 alone and central districts commanding 18-23.40 euros per square meter, housing costs consume disproportionate household income. The extremely low 2 percent vacancy rate makes Berlin one of Europe's most competitive rental markets, leaving tenants with minimal options and landlords with significant pricing power.

Berlin’s city administration is addressing affordable and sustainable housing through ambitious long-term construction goals, regulatory reforms, and targeted support programs. The most recent major target is the construction of at least 222,000 new flats by 2040, with half intended for public benefit and social use, as stated in the city's latest urban development plan. Annual targets are around 20,000 units, although actual delivery (about 16,000 completions in 2023) consistently falls short due to high land and construction costs, limited available land, and a steep decline in building permits.

Key policies and activities include prioritizing projects by six municipal housing companies that build, own, and manage affordable rentals below market rates. These companies receive mandates to expand their housing stock via both new construction and acquisitions, with additional requirements for a substantial share of legally subsidized social housing units within new projects. Recent example projects combine mixed-income housing and social infrastructure, such as childcare centers.

The city also supports housing cooperatives (Baugenossenschaften), which reinvest rental income into maintenance and the construction of lower-cost homes, made feasible through public subsidies and preferential financing. Berlin is experimenting with pilot projects like modular, low-energy homes, while planning law reforms aim to speed up approvals for apartment buildings. On homelessness, initiatives such as Housing First have been launched, but their impact remains limited. City strategies emphasize lowering operational and construction costs, socializing investment risk, and securing more consistent federal support for subsidy programs.

Housing cooperatives in Berlin, known as Baugenossenschaften, are an established third sector distinct from both private and municipal housing, with a significant history in providing stable, affordable homes protected from speculation. As of 2025, cooperative housing constitutes an estimated 9–11% of Berlin’s total housing stock, representing approximately 180,000–220,000 units out of over two million dwellings citywide.

Recently, Berlin has increased its policy and financial support for housing cooperatives to strengthen their capacity in the face of sharply rising rents and intensified demand. This includes new regulatory frameworks and a dedicated funding guideline introduced in 2023, offering interest-free loans for both new construction and acquisition of existing housing. The city also subsidizes membership shares for lower-income households and actively supports cooperatives in purchasing properties to keep them permanently affordable, with recent examples including multi-million euro grants for acquisitions in Spandau and Kreuzberg.

Cooperatives have shown steady if modest growth in both new construction and acquisitions, notably aided since the start of targeted subsidy programs in 2018. However, their overall share of new housing remains limited, and city policy increasingly emphasizes expanding their role. This is part of a broader strategy to stabilize the rental market, secure long-term affordability, and preserve social diversity amidst Berlin’s acute housing pressures.