Housing is the issue in Berlin – and not just since the Left’s election victory. Everyone in the city knows what a catastrophic state the housing market is in. Affordable housing is so scarce that families have to remain in flats that are too small, while people living alone sometimes spend decades living in flats that are actually too large for them.

There is hardly any movement in the market, and the socialisation plans of the election winners are unlikely to change that significantly. Even Left politicians such as Schwerdtner, Eralp and others know that socialising around 220,000 flats could only stop rents in the city from rising further – it would not create new housing.

Every year, the Investitionsbank Berlin (IBB) assesses the state of Berlin’s housing market in its Housing Market Barometer. One interesting finding: for the first time, the experts surveyed identified an oversupply of housing – albeit in the upper price segment. Those who can afford to pay more than €20 per square metre can still find a flat, particularly in Mitte and Steglitz-Zehlendorf.

Housing in Berlin: Shortages Everywhere

Everyone else, however, has to get in line. In the rent-controlled, lower and middle price segments, the barometer identifies a clear supply shortage in parts of Berlin. In the lower segment (net rent excluding utilities: less than €10 per square metre), Pankow, Charlottenburg-Wilmersdorf and Steglitz-Zehlendorf are particularly affected, but demand also exceeds supply in the other districts.

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Looking ahead over the next three years, the barometer finds that the situation will worsen in Friedrichshain-Kreuzberg, Marzahn-Hellersdorf and Treptow-Köpenick, while respondents expect an improvement in Steglitz-Zehlendorf, Charlottenburg-Wilmersdorf, Reinickendorf and Lichtenberg.

In the price-controlled segment, which is particularly important for providing housing to low-income households, the situation is especially critical according to the IBB Barometer. The main problem is the decline in the stock of social housing as rent and occupancy restrictions expire.

Although more than 30,000 subsidised flats were approved through Berlin’s new-build housing subsidy programme between 2014 and 2026, half of the districts expect the market situation to remain unchanged over the next three years. New construction can therefore only offset the shrinking stock to a limited extent.

Mitte Under Pressure

In the middle price segment (€10–20 per square metre), which covers the majority of households on average incomes, the supply of rental housing is insufficient across the city. Throughout Berlin, demand exceeds supply. Not a single district can provide enough housing in this segment.

At the same time, across all flat sizes, the middle price segment has the second-highest level of demand after the lower segment. A slight improvement is expected only in Lichtenberg and Treptow-Köpenick. In all other districts, supply will remain just as limited – or deteriorate further.

Rents Are No Longer the Number One Problem

On top of already high net rents, many households face another obstacle: the costs of heating, hot water and utilities are spiralling out of control amid ongoing crises. For the first time in the history of the Housing Market Barometer, respondents rate rising ancillary and operating costs as the most pressing problem in the existing housing stock – ahead even of rising net rents themselves. This “second rent” is increasingly becoming the real driver of housing costs and is pushing even households with solid incomes to the limits of what they can afford.

At the same time, Berlin is building housing that does not match actual demand: new developments are predominantly aimed at the upper price segment – and in some cases have to be, in order to cover construction and financing costs. However, more than 95 percent of reported housing demand is in the lower (58–60 percent) and middle price segments (37–40 percent). People on middle incomes are therefore under pressure from both sides: they earn too much to qualify for social housing – and too little to afford luxury rents above the €20-per-square-metre mark.

This text was originally written and published on the 1st of October in German. It was translated into English with the use of artificial intelligence (AI).