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November 15, 2013 6:50 pm
The cluster of 16 homes perched at the top of a slope in northern Berlin is striking for its sophisticated use of innovative, contemporary design. Created by emerging local architects, the undulating swaths of corrugated metal and organic forms create a forest of town houses that conjure up an image of a modernist, urban commune.
Yet what makes the project unique is not its inventive aesthetics; it is the ground on which it stands. Built on a single plot of land where part of the Berlin Wall once stood (on Bernauer Strasse in the district of Mitte) these glass-and-steel structures sit on cheaply purchased land that is off-limits to big property developers. The 16 families who live on the half-acre site obtained a 199-year lease at a cost of just €34,000 each. The residences were each designed and built on the land for a cost of about €200,000.
The unusual move, approved by city planners who are committed as much to progress as they are to preserving Berlin’s history, is a desperate attempt to keep rising real estate prices at bay in the areas where the wall once stood.
“You couldn’t find anyone interested in developing these areas around the wall just a few years ago,” says Laura Fogarasi-Ludloff, a principal designer at Ludloff + Ludloff Architekten. She and her husband Matthias designed one of the homes and now live there with their two teenage sons. “Developers are now eating away at the areas around the wall and making it a much more expensive place to live,” she says.
After the fall of the wall in 1989, Berlin’s property market struggled until the early 2000s when foreign buyers began to show an interest. The market is now soaring. Home prices jumped 11 per cent in 2012 against a year earlier, with a record €12.75bn in transactions, according to a survey by the German Real Estate Association (IVD). In the past five years house prices have risen 31 per cent. Foreign investors, emboldened by Germany’s economic stability, accounted for 76 per cent of those transactions, the survey reports.
Nowhere are property values rising faster than along the streets that surround the gritty areas where the wall once stood, according to an estimate by Ziegert Immobilien, a real estate services company.
Nestled between remaining portions of the wall and the foundations of houses abandoned in the zone between east and west are increasing numbers of newly built condominiums sparkling with fitness centres, spas, and penthouse apartments.
In all, 11 projects, representing more than 500 new condo units are under construction on land directly on or near where the wall once stood, according to an estimate by Ziegert Immobilien.
“After years of development Berlin is now running out of buildable land,” says IVD vice-president Jürgen Michael Schick. “Population growth and more foreign buyers mean that developers need to find new areas to build and these areas around the wall are now appealing.”
For more than a decade after Germany’s reunification in 1990, the areas around the wall were among the least coveted by developers. Littered with remnants of the wall’s concrete slabs, the area offered little more than a grim collection of empty lots and crumbling façades still scarred by the second world war. Much of the land was city-owned and reserved for affordable housing.
But crippling debt and unemployment forced the city to sell off the land without restrictions to private investors. Philipp C Tabert, head of Berlin-based real estate consultancy Winters & Hirsch, estimates that private investors – including private equity funds Blackstone Group, Cerberus Capital Management and Goldman Sachs Group’s Whitehall investment fund – have poured €2bn into purchasing city-owned properties over the past 10 years.
Today, these areas are lined with upscale restaurants, designer boutiques, art galleries and some of the most expensive real estate in the German capital.
Living Bauhaus, a German developer, is building its latest condominium directly behind the East Side Gallery, a 1.3km section of the wall with 101 artworks painted on it by more than 50 artists from around the world. The former bulwark separating East Berlin from West Berlin is today a major tourist attraction.
Despite scattered protests from long-time residents, the 14-storey project, called Living Levels, will rise 196ft and straddle the districts of Friedrichshain and Kreuzberg when completed in early 2015. It will overlook the river Spree and contain 61 apartments with custom-designed interiors. Prices start at €2,750 per sq metre and rise to €10,000 per sq metre depending on unit size, views and amenities. About 50 per cent of the 61 units have been sold, the developer says, with buyers typically from the US, China and Australia, as well as Germany.
Living 108 is another upmarket development under construction a few steps from where the Berlin Wall once stood in the Mitte district. The 128- unit condominium is being developed by Peach Property Group, which has developed several high-end condominium projects in Berlin in the past decade. Units at Living 108 will range in size from two-room flats measuring 38 sq metres to four-room apartments with balconies measuring 121 sq metres. Prices start at €197,500 and rise to €704,000. Amenities will include a fitness centre, landscaped courtyards, and private rooftop terraces. There will also be underground parking. The project is expected to be completed by spring 2015.
● German banks expect a deposit worth 20 per cent of the property’s total value
● A typical mortgage rate is fixed as low as 2.7 per cent for 10 years
● Buyers typically pay about 12-15 per cent of the purchase price in closing costs, including broker fees of about 7 per cent
What you can buy for . . .
€500,000 A two-bedroom unit in a renovated building in the central Berlin district of Mitte
€3m A three-bedroom apartment measuring 180 sq metres in a new condo with a 24-hour doorman and fitness centre
€5m A penthouse with floor space measuring 3,000 sq ft, and custom-designed interiors
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