Affluent Buyers Seek a Piece of Berlin's Past

By NIELS C. SORRELLS

Published: August 16, 2012 

 

http://www.nytimes.com/2012/08/17/greathomesanddestinations/17iht-reberlin17.html 

BERLIN — There are lots of apartments in Berlin. But the demand, at least among affluent prospective buyers, is for those built before World War II, with their high ceilings and almost floor-to-ceiling windows. And their supply is limited for the simple reason that so few survived the war.

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Research from Winters & Hirsch Property Consultants in Berlin found that 27.2 percent of the city’s apartment buildings were constructed before 1918. “The old character plays a role, naturally,” said Philipp C. Tabert, the company’s managing director. “It has a lot more charm than a new building.”

But that charm comes at a price. Older apartments sell for an average of €155,000, or about $191,000, according to the company’s 2011 sales data. That is €1,810 per square meter, or about $207 per square foot.

In comparison, apartments built from 1970 to 1990 average €1,490 per square meter; those built from 1949 to 1969 average €1,255 per square meter, according to Winters & Hirsch.

Experts say that in addition to the higher cost, a historic apartment is likely to be more expensive to maintain.

Many fall under ensembleschutz, or ensemble protection laws, a program in which the city and residents of a neighborhood with historic character agree to try to retain that ambience. In those areas, for example, apartment owners would need permission to change their windows, to ensure that a building’s historic facade is maintained.

Historical preservation laws known as denkmalschutz place even more rigorous restrictions on almost any change. But Ulf Sieberg, an expert on energy efficiency and building renovation with the German environmental organization NABU, said only about 3 percent of all buildings in Berlin were subject to those laws.

Steffen Riedel of Eza!, an environmental and energy conservation consulting firm in southern Germany, said potential buyers of historic properties should press sellers for details of any preservation restrictions and check with the local authorities about specific requirements.

“It can be frustrating and expensive” to maintain the charms that made an apartment desirable in the first place, Mr. Riedel said.

He also said that many older buildings had poor air circulation, which over time could lead to problems with mold, and that they might lack insulation.

Mr. Sieberg said potential buyers should be aware that German law calls for the country to become climate neutral — producing no pollution or greenhouse gases — by 2050, a goal that will require many buildings to become more energy efficient. Because the date is so far in the future, the enforcement of building codes and environmental standards now is perceived as lax, and many owners have not brought their units up to even current building codes.

His organization is working with the government on the standards, with a focus on establishing the true cost of energy efficiency renovations — for example, determining who would pay for scaffolding that would be needed for a building overhaul.

One idea to ensure compliance is to change rental laws so that owners are required to bring apartments up to code. He acknowledged that such action would produce higher rents, but if energy efficiency is seen as important, Mr. Sieberg said, “then you have to be prepared to pay the consequences.”

It is important to set such guidelines, he said, partly because some owners will never invest enough in rental properties where they do not live themselves. Also, many buyers are foreigners who plan to use their vintage apartments as income-producing vacation rentals and do not want to pay for retrofitting or do not know the laws.

Darrell Smith, whose company Buy Berlin focuses on helping foreigners find properties in the city, said it had become more difficult to find high-quality historic apartments over the past year because demand had skyrocketed. “Basically, the demand is being driven by more people wanting vacants because they want to take advantage of touristy areas,” he said, noting a move away from the tradition of buying occupied apartments and continuing to collect rent from the existing tenants.

Marc Dennis, of Manchester, England, who bought an apartment of 33.5 square meters, or about 360 square feet, in the Friedrichshain neighborhood through Buy Berlin, fits that profile. He plans to use his apartment, in a building dating from 1910, when he is in town and to rent it the rest of the time, primarily to tourists.

Such rentals are legal, though the Berlin legislature is considering banning the practice.

Mr. Dennis said he expected to start renting out the apartment fairly soon. He said that though the cost of buying an apartment in Berlin had been rising — he would not specify how much he paid, saying it was between €70,000 and €100,000 — the city continued to be affordable compared with other European capitals.

As for keeping the apartment up to code, he said he would rely on the property managers referred by Buy Berlin to let him know about any changes that might be needed.

The management services come at a cost, he said, but, “to be fair, the amounts I’m going to be paying are extraordinarily reasonable in terms of what will be covered,” including assistance in finding repair services and legal help with renters.

The Friedrichshain neighborhood, Mr. Dennis said, is a “place where young professionals are looking to let in or rent in. It just seemed to tick all the boxes.”