Michael Heinze says his landlord is trying to force him out of his trendy Kreuzberg-district apartment — the owner wants to sell it because these days, Berlin property has become lucrative.
“He accused me of not paying the rent, of defamation, of all sorts of things to try and intimidate me into moving out,” said Heinze, 69, who says his rent has doubled in the past few years. “It got to the point where I started to wonder if he had a machine constantly churning out eviction notices.”
Long a mecca for artists and other creative types with its cheap housing, hip neighborhoods and “poor but sexy” character, Berlin’s property values have jumped 30% to 50% in the past three years, and doubled in the past eight. That has led to locals fretting over the skyrocketing rents they say threaten the vibrant, creative vibe of their city as well as their homes.
That sharp increase in real estate prices is attributed to the financial crisis in 2008 and the euro crisis that followed, analysts say, as concerned Europeans looked for somewhere to safely park their cash. While property has generally been seen as a safe investment, German property has been viewed as the safest bet — especially in cheap Berlin, where real estate goes for far lower than in other European capitals.
As a result, Greeks, Spaniards and Italians — anxious over the financial future of their cash-strapped economies at home — poured in to buy.
“Many buyers were feeling so insecure that they would try and buy apartments blindly, without having seen them,” recalled Ruth Stirati, head of a real estate firm in Berlin that specializes in catering to Italian buyers. “The worse the crisis became, the more inquiries we received.”
Stirati said business spiked sharply in November 2011 – two months after the Italian parliament passed a raft of austerity measures that prompted mass demonstrations on the streets of Rome.
Rocketing property prices don’t seem to be putting off Stirati’s clients, who say Berlin remains as attractive as ever.
Italian filmmaker Franco Fracassi, 47, bought two apartments in Berlin in March and points out that although property values are increasing, prices still seem fantastically cheap compared with Rome.
“In Rome, an apartment goes for a least five times the price,” said Fracassi. “It’s just not a normal market there.”
In addition to the income from renting out his apartments, Fracassi said he invested in Berlin because he likes the city.
“It’s a nice city and I have not ruled out moving my family over there,” he said.
Italian banker Valter Badariotti, 40, said he bought three properties in Berlin because London and Paris were too expensive. He also worries about the deteriorating economic situation in Italy.
“I have to think of the future,” he said. “My children, ages 3 and 5, might go to university in Berlin.”
These euro crisis refugees, however are causing an uproar in Berlin, with locals blaming Greeks and Italians for the steep property price hikes. It has even become an issue taken up by all political parties ahead of September’s federal elections.
Even so, Roland Bomhard, head of real estate at law firm Hogan Lovells, says buyers investing in Berlin residential real estate are still overwhelmingly German, with foreigners accounting for only roughly 30% of all new buyers in recent years.
“(Mortgages) are really cheap in Germany and readily available for residential investment, much cheaper than in basically any other country in the eurozone,” he said. “In Berlin you buy the stability of Germany with almost an Eastern European perspective for growth.”
Lucas Bauernfeind, 28, a native Berliner, says the city is no stranger to change, and the shift in attitudes toward property ownership as well as the property boom is just the latest thing to hit the city.
“It’s like that famous quote – ‘Berlin is a city condemned always to become, never to be,’ ” he said.
Even so, some locals continue to fight to keep their city’s character intact and residents in their homes.
“No to speculation!” chanted protesters defending residents of a building in Berlin’s well-heeled Mitte district from being driven out last week after eviction notices were sent by its owners looking to sell. “We’re all staying!”
Retiree Angela de Ridder, 65, is fighting the same fight. Since 1976, de Ridder has lived in an apartment in a converted factory.
The landlord is trying to evict her to sell the building, she said.
Neither Heinze’s nor de Ridder’s landlords could be reached for comment.
“When I moved in, this apartment had nothing — no sockets, no fixtures, just cold running water — I built everything in myself,” she said. “My rent has gone up eight times since I moved in. If they manage to evict me, they could probably sell this flat for around a million euros.”
Source – http://www.usatoday.com/story/news/world/2013/04/28/berlin-real-estate-price-rise/2094463/