Report

Interest rates and market conditions

Why the market turned in 2022, what has changed since then and why existing and newly signed tenancy agreements keep drifting further apart.

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Summary

Interest rates explain the price correction, not the headline.

around 3 percentage points The rise in long-term interest rates since 2020 Deutsche Bundesbank, yields on federal securities, ten-year residual maturity

around €1,000 per month more interest per month on a loan of €400,000 Worked example, derivation in the section ‘What the series shows’

+7.0% vs +18.8% Rents excluding ancillary costs versus consumer prices overall, 2020 to 2024 Office for Statistics Berlin-Brandenburg

1.97% Vacancy in Berlin, around 40,700 flats Census 2022, reference date 15/05/2022

The data series

The interest rate turnaround in one series

Every day, the Bundesbank publishes the interest rate on federal government bonds. We use the series for bonds maturing in ten years. It is the reference point for long-term loans: Pfandbriefe (covered bonds), which banks use to refinance mortgages, are linked to it, and mortgage rates are in turn linked to them. The values below are the average of all trading days in a year.

Deutsche Bundesbank

Interest rate on federal bonds with a ten-year term

3.52% on 18/09/2026, the latest value. The values below are annual averages.

20150.54%

20160.11%

20170.38%

20180.47%

2019-0.22%

2020-0.48%

2021-0.33%

20221.17%

20232.47%

20242.36%

20252.65%

20263.05%

positive year negative year

Source: Deutsche Bundesbank, yields on federal securities with annual coupon payments derived from the term structure, residual maturity ten years. Daily values, combined by us into annual averages. The value for the current year covers only the trading days so far. Grey bars indicate negative years.

What the series shows

Between 2019 and 2021 this interest rate was negative. Anyone holding federal bonds therefore paid money instead of receiving it. In this phase, practically any property with ongoing income looked attractive by comparison, and this is exactly what drove prices up. From 2022 the situation reversed. The annual average rate rose by around one and a half percentage points and has been above two per cent again since 2023 (chart above).

What this means for financing can be calculated without a forecast. On a loan of €400,000, three percentage points more interest cost around €12,000 extra in the first year. That is about €1,000 a month.

This is exactly the money buyers have been missing since then. And purchase prices had to fall by roughly this amount so that the same households could still afford the same flats. The price series in the Berlin housing market report show this adjustment.

Worked example

Loan amount€400,000

Difference in interest rate3 percentage points

Additional interest cost in the first yeararound €12,000

Per monthabout €1,000

The mortgage rate is higher than the rate in the chart because banks add a margin for their profit and their risk. We deliberately do not give a mortgage rate figure as long as we cannot back it up with an official series. The series above reliably shows the direction and extent of the movement.

How we help

Whether a price is affordable for you depends on your financing, not on the series above. We work with a nationwide financing network and present offers from several banks for comparison. You clarify the monthly instalment, the length of the fixed-rate period and your equity with our financing expert (licence under § 34i GewO, German Trade Regulation Act) before you go to viewings.

To the financing section on the Buy page

The decision remains yours. If a partner pays us anything, we tell you beforehand. Brokering the property loan, legally termed Immobiliardarlehensvermittlung (real estate credit brokerage), is provided by Maximilian Vigansky in person under § 34i GewO (German Trade Regulation Act). General information, not financing or investment advice.

What is affordable

Income versus prices and rents

The Office for Statistics measures how prices, rents and incomes develop. All series start at 100 in 2020. A value of 118.8 therefore means: 18.8 per cent more than in 2020.

Office for Statistics Berlin-Brandenburg

Where the series stood in 2024, base 2020 = 100

Consumer prices overall 118.8

Net cold rent 107.0

Gross cold rent 106.2

Ancillary housing costs 101.8

Net income 118.9

Rents and ancillary costs Consumer prices and income

Scale from 100 to 120. The bar length shows the distance from the base 2020, not the index level itself. All values are in the table below.

Consumer prices, rents, ancillary housing costs and net income as an index, 2020 = 100 (source: Office for Statistics Berlin-Brandenburg)
Index (2020 = 100)	2015	2020	2022	2024	since 2020
Consumer prices overall	94.6	100.0	110.1	118.8	+18.8%
Net cold rent	92.7	100.0	102.1	107.0	+7.0%
Gross cold rent	93.3	100.0	102.5	106.2	+6.2%
Ancillary housing costs	96.3	100.0	101.0	101.8	+1.8%
Net income	78.9	100.0	113.3	118.9	+18.9%

Net cold rent means rent without any ancillary costs. Gross cold rent: rent plus ‘cold’ ancillary costs, i.e. without heating. Source: Office for Statistics Berlin-Brandenburg, consumer price index and income accounts. Percentages in the last column calculated by us.

The finding missing from most debates

Rent excluding ancillary costs rose by seven per cent between 2020 and 2024. Consumer prices overall rose by almost nineteen per cent. After deducting general inflation, rents therefore fell over this period. Incomes after tax rose roughly as much as prices.

This seems to contradict the advertised rents, which have risen much more sharply in some districts, as the assessment in the market data section shows. Both are true, because they measure different things.

The official series includes all rented flats, which means mainly existing tenancies. For these, the landlord may raise the rent only to a limited extent and slowly. Advertised rents, by contrast, only show what is asked for a new letting.

In Berlin a gap has opened between these two figures that keeps widening. For the property market this has three consequences.

Less supply

People are less willing to move, because changing to a flat of the same size often means a much higher rent. That takes supply off the market.

Value depends on the tenancy agreements

Two identical buildings are worth different amounts if one has old tenancy agreements and the other new ones.

Pressure for regulation

Political pressure to regulate new lettings is growing, which for owners is a calculable risk, but not one they can ignore.

How we help

For a let building, the tenancy agreements determine the value. We read them, work through the income and tell you which part of the value depends on the current rents and which on the building itself. Request a valuation · Investing with BBI

Supply side

Vacancy and construction activity

At the 2022 census, vacancy was 1.97 per cent, around 40,700 flats. As a rule of thumb, a functioning housing market needs about three per cent empty flats as a reserve, to absorb moves, refurbishments and the time until reletting. Berlin is below that. Of the vacant flats, 29 per cent had been empty for more than a year and are thus practically withdrawn from the market.

Census 2022 and rule of thumb

Measured vacancy against the reserve a market needs

Vacancy in BerlinCensus 2022, reference date 15/05/2022 1.97%

Reserve for movesRule of thumb, not a measurement about 3%

measured rule of thumb

Scale from 0 to 3 per cent. The lower row is a rule of thumb for a functioning housing market, not a surveyed value.

Construction in Berlin is very uneven. We measure it as the number of new flats per thousand existing flats. Treptow-Köpenick was at the top in 2024, Charlottenburg-Wilmersdorf and Steglitz-Zehlendorf at the bottom. In these two districts, fewer than one new flat was added in 2024 for roughly every five hundred existing ones.

How we help

Where little is built, access to supply is what counts. If you set up a search profile with us, you see suitable properties as soon as we take them on, not only later on a portal. Create search profile

For owners in these districts, the same figure means: supply stays tight, regardless of where interest rates stand. We will tell you what this means for your property with an initial assessment.

Assessment

What this means for your decision

The series above describe the market. Two readers come to this page with different questions, and the figures answer them differently.

If you want to sell

The decline since 2022 is due to interest rates, not a lack of demand. At 1.97 per cent, measured vacancy is below the roughly three per cent a market needs for moves and refurbishments.
In Charlottenburg-Wilmersdorf and Steglitz-Zehlendorf, fewer than one new flat was added in 2024 for roughly every five hundred existing ones. Where so little is built, supply stays tight, regardless of where interest rates stand.
For a let building, the existing tenancy agreements determine the value, not the rent figure from the headline.

Request an initial assessment for your property

If you want to buy

The price you see today already reflects the interest rate movement. The additional cost of around €12,000 in the first year is the reason purchase prices have fallen.
In districts with little new building, the choice remains permanently limited. Waiting there rarely gains you anything.
If you sort out your financing first, you know which price you can afford. On a €400,000 loan, three percentage points make a difference of around €1,000 a month.

Create a search profile and see properties in advance

Clarification

What we do not conclude from all this

We do not predict prices. Nobody knows how interest rates will develop over the next few years. Without that, any price forecast for the property market is just an assertion.

Three things can be said with confidence. The direction of interest rates explains past price movements very well. Supply in Berlin remains tight. And the gap between old and newly signed tenancy agreements is the most striking tension in the market.

If you want to base a decision of your own on this, align it with your own financing and with how long you want to hold the property. Not with a market opinion.

Maintenance

Updates to this report

Bundesbank interest rate series: each time the website is rebuilt
Price, rent and income series from the Office for Statistics: annually
Vacancy figures from the census: at intervals of several years
Text of this report: reviewed quarterly

The data date of the interest rate series is shown on the chart.

Sources for this report: Deutsche Bundesbank (yields on federal securities, ten-year residual maturity, retrieved each time the website is rebuilt). In addition, the Office for Statistics Berlin-Brandenburg (consumer price, rent and income indices, and completions) and Census 2022 (vacancy, reference date 15/05/2022). The asking rents by district come from Investitionsbank Berlin.

Compiled by BBI Immobilien. Information without guarantee. This report is not financing or investment advice.

Frequently asked questions

Interest rates and the market: frequently asked questions.

Answers as of 20 September 2026

Why does this page show the interest rate on federal bonds and not the mortgage rate?

Because this rate can be verified and comes fresh from the Bundesbank each time the website is rebuilt. The Bundesbank publishes it daily. Banks' Pfandbriefe (covered bonds) are linked to it, and mortgage rates in turn are linked to those. We have not found an official, continuously updated series solely for mortgages with the rate fixed for more than ten years. Reading a figure off a chart was out of the question.

Does the interest rate alone explain the price correction?

Not alone, but it explains more than any other single figure. Long-term interest rates have risen by around three percentage points since 2020 (see the Bundesbank series above). If you work out the monthly instalment, you see immediately: with the same instalment, the same purchase price is no longer affordable. Construction costs, energy requirements and sellers' price expectations also play a part, but a smaller one.

Are rents really rising as sharply as the headlines say?

For new lettings yes, for existing tenancies no. The official rent series includes all flats and has risen more slowly since 2020 than consumer prices overall. The striking jumps concern almost only newly signed contracts. For owners this means: the rent paid in your building today does not, as a rule, follow the headline.

What really helps at this point.

Market data for all twelve districtsWhat the interest rate situation has done to the individual districts. Berlin housing marketPrices and transactions over the same period. Additional purchase costs in BerlinThe equity you need alongside the financing. Calculate your pricing strategyWhat an asking price that is too high costs over the marketing period.

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