As well as being the political center of Germany, Berlin is also a real hub in terms of construction. No other German cityscape has more cranes towering skywards than the metropolis by the Spree. This construction boom shows no signs of waning any time soon, as a recent forecast by the Investitionsbank Berlin (IBB) confirms: in the next three years, a projected 55,000 new homes will be completed. This estimate is based on more than 100,000 construction permits issued for the 2015 to 2017 period.
IBB calculated that there were a total of around 20,000 construction permits issued in 2014. It predicts a further increase for 2015 - 2017, taking the total to 35,500 per year. This would place the current growth phase ahead even of that seen directly after reunification. Take 1995, for instance, when ‘only' 30,000 construction permits were issued, 70 percent of which were for areas in the former East.
There are several reasons for this construction boom, the most important of which is a continued influx of new residents. Net immigration to the city is currently around 40,000 individuals per year - a trend that IBB fully expects to continue. By the end of 2013, there were around 1.9 million residential apartments in the German capital. Due to the ever-expanding population of the city, the Berlin Senate expects requirements to increase by around 140,000 by 2030. Combined with the lingering uncertainty surrounding future economic development in the Eurozone and current low-interest rates, this has encouraged investment in material assets, further bolstering demand for real estate.
However, pursuant to the IBB report, the positive effects of the construction boom will not be felt for some time, due to the fact that several years generally pass between approval and final realization of a construction project. Indeed, some projects are never actually implemented. IBB figures place average completion rates in Berlin at 70 percent. According to the report, however, there is no need to worry about the capital becoming overcrowded; unlike many other German cities, potential construction space for new residential projects is still in plentiful supply in Berlin. It can also be expected that pressure within the property market will ease, not only in Berlin, but also in other urban areas. Since 2010, the number of construction permits issued has increased across the country - a trend that is set to continue, albeit somewhat less markedly in 2015. According to the Federal Statistical Office, 1.5 percent more residential properties were approved between January and March compared to the same period in the previous year.