Locals say skyrocketing rents threaten the vibrant, creative vibe of the city as well as their homes.
BERLIN
—
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."
