Battling the Berlin Rental Market
– The challenges and the value of a home search service-
Have you ever tried to find an apartment in Berlin? I am not asking about the 90’s, I mean lately!
The last time I looked for a new apartment for myself was 4 years ago. It was 2014, when we still had the commission for real estate agents in the rental segment. The commission could only be avoided by finding private offers, which was my goal. I knew exactly what I wanted… A 4 room Altbau (1900 building) apartment with Dienlenboden (historic flooring) and a balcony on a quiet Schöneberg street. The location needed to be within a radius of 15 Min of Hauptstraße, for our daughter’s Kita (day-care).
In 2014 it started to become difficult to find what you were looking for. Schöneberg had become more popular for families and it seemed as if everyone was pregnant and looking for affordable 4 room apartments. It took nearly six months, but I found the perfect place on a nice quiet street, not too far from Kita, 120m2 Altbau, with 4 rooms and a balcony. The price for this was 1.270,00 € warm – no commission!
Commissions for rental apartments no longer exists – but that is the only good news. Speaking from my professional experience, in 2018 people are paying close to 1.270,00 € for a two room apartment! That is a rental rate of about 19,00€ per m2 – which means prices have almost doubled in 4 years!
My business partner, Sabine Engelhardt, and I own and operate a relocation agency, Move to Berlin. We provide personalized support for international executives moving to Berlin. Our services include housing/office search, immigration services, language learning referrals, and much more. The housing search service is by far the most time consuming.
The problem that faces Berlin is the lack of apartments in this growing and thriving city. The numbers don’t lie, since 2015 there was an average of 50,000 people that moved to Berlin. In total, 3,5 Million people are living in Berlin right now. It is estimated that sometime between 2025 and 2035, Berlin will hit the 4 Million mark.
Issues with local politics and the building industry not being able to react fast enough to keep up with the demand has created a housing crisis. According to recent forecasts, in 2021, Berlin will have a lack of 100.000 apartments.
The stress on the housing market is already obvious, and it will only continue to get worse.
We feel the tension of this market situation in our daily work. The result is, that whoever is searching for an apartment is in an inferior situation. When looking at the apartment ads these days, you will notice many do not have a contact phone number. With the massive apartment shortage owners need to do less and less to find a tenant. Usually, email will be the only form of communication available.
Many of our clients come to us for help after several of unanswered emails to many apartments. We hear the same story time and time again: “We responded to the ad in English, and received no response.” Property management companies receive about 150 emails for one advertised apartment. No surprise that they have to make a cut somewhere. When you are lucky enough to find an ad with a phone number, you wait on hold for ages, to then have to leave a message. A call is returned back 30% of the time.
Challenge #1 –Getting an Invitation to the Viewing.
We meet with our clients to go over the search criteria, and give them realistic expectations based on their wish list. The next step is to start with all the Internet platforms and reach out to our local real estate partner contacts. After we gather together all of the available apartments within the clients needs, we present them in detailed emails. Once our client has chosen apartments they wish to view, we work on getting invited to a viewing.
In most cases, to organise just 4 viewings often results in contacting at least 15 real estate agencies, management companies, or private owners. As an agency acting on behalf of a client, it has made a difference in getting appointments for a viewing. Most owners and companies are more inclined to work with a tenant who has hired a professional service for their home search.
Challenge #2 Getting Chosen for the Apartment.
Local companies want to work with local people, and it’s why working with a relocation service is so important. We make sure to ask the crucial questions and leave the best impression. The next step to getting the chosen apartment is to hand in the completed application, professionally prepared PDF file, as fast as possible. An incomplete application is rarely accepted, and it’s hardly ever possible to resubmit before they have gone on to the next candidate. The application process is almost like applying for a job where there is plenty of competition.
After submission, follow up becomes very important, and we find that makes a big difference. Until we get a contract we continue to work with our clients, advising them only to apply to the apartments they feel 100% are a fit. Berlin has more than 600 property management companies, and though we don’t have a direct contact at each, for the ones we do, our clients come first.
There is a lot of work that goes into finding someone the right apartment, and it is a service that does come at a higher cost. In Berlin’s market today, hiring a relocation agent is worth every penny! For 80% of our clients we succeed to find the right place within 4 weeks! Finding an apartment in Berlin is hard, but it doesn’t have to be.
My advise for anyone moving here, that doesn’t speak German – get a relocation agent…. And if you already live here, speak the language, and have a long-term place – don’t move!