A redevelopment area is a clearly defined urban space in which structural redevelopment work is planned and carried out. This primarily concerns districts in which the building fabric is outdated and/or urban development problems exist. This is often the case in areas with historic houses that were built around 100 years ago. The redevelopment plans also affect certain parts of the infrastructure, such as the expansion and maintenance of traffic routes and public spaces. The location of properties in redevelopment areas influences property prices. In this article, you can find out how the valuation is carried out and what this means for buyers and sellers.
The influence of redevelopment areas on real estate prices in Berlin
If you want to buy or sell a property, you should pay attention to whether there is a redevelopment notice or whether the property is generally located in a redevelopment zone. In Berlin, many of these zones are located in the north of the city, but also in Mitte and Neukölln. Müllerstraße and Badstraße/Pankstraße in Wedding, Turmstraße in Moabit, Langhansstraße in Pankow and the northern part of Luisenstraße in Mitte are among the most important redevelopment areas. The areas on Frankfurter Allee in Lichtenberg, the Niederschöneweide neighborhood and Wilhelmstadt in Spandau are also being developed.
Current redevelopment areas in Berlin (as of February 2025):
- Turmstraße in the district of Moabit (Mitte)
- Badstraße/Pankstraße in the Gesundbrunnen district (Mitte)
- Müllerstraße in the Wedding district (Mitte)
- Nördliche Luisenstraße (center)
- Wilhelmstadt (Spandau)
- Niederschöneweide (Treptow-Köpenick)
- Langhansstraße (Pankow)
- Frankfurter Allee North (Lichtenberg)
- Southern Friedrichstadt (Friedrichshain-Kreuzberg)
- Karl-Marx-Straße/Sonnenallee (Neukölln)
The comprehensive refurbishment of areas usually takes many years, which is why residents may be entitled to rent reductions. If the property has already been redeveloped, the impact on the property price for this specific property is generally low at first. If there is a refurbishment note in the land register, there will be construction work on the property in the near future. Subsidies are usually paid for refurbishment measures undertaken by the owner. Regulatory measures, such as development work and clearing, are the responsibility of the local authority. Under certain circumstances, however, the homeowners may be asked to contribute to the costs.
The influence of redevelopment area status on real estate prices has already been comparatively strong in Berlin in the past. With these measures, the city is trying to upgrade the areas and create new incentives for people to move in. Better transport connections, good infrastructure, renovated facades and energy-efficient modernization are reasons why properties are being bought or sold for more money on the market. A great example of success here is Prenzlauer Berg, where redevelopment areas such as Helmholtzplatz, Kollwitzplatz, Bötzowstraße and Winsstraße were significantly upgraded in the 1990s.
Trends in real estate prices in the redevelopment area
There are currently ten important redevelopment areas in Berlin where housing is to be upgraded. These are located in Wedding and Moabit, Lichtenberg, Pankow, Neukölln, Kreuzberg, Niederschöneweide and Spandau. A positive trend in real estate prices can be expected here in the long term as a result of the measures.
A particular advantage for the owners is that the focus in redevelopment areas such as Müllerstrasse and Seestrasse is not on modernizing the buildings, but on improving the infrastructure. The aim is to revitalize the core of the neighbourhoods and develop them into areas with an extensive commercial offering. In northern Luisenstrasse and along Pankstrasse, there are also plans to unseal private open spaces and expand the mixed use of housing and infrastructure.
The status of a redevelopment area is therefore regularly accompanied by a perspective. This has an immediate and, above all, long-term effect on property prices and must be taken into account when determining values. For Müllerstrasse, Badstrasse and Pankstrasse, Turmstrasse, northern Luisenstrasse, Frankfurter Allee Nord, Niederschöneweide and others, prices could go up in the coming decade.
The “redevelopment area” status is an important aspect to bear in mind if, for example, you want to buy a condominium in Wedding, are interested in purchasing a property in Berlin-Pankow or are planning to buy a condominium in Berlin Moabit.
The valuation of real estate in Berlin
If you want to understand the valuation of real estate in Berlin, you should take a close look at the services and procedures offered by real estate agents and appraisers. First of all, they look at the property itself, deal with the building fabric and also consider its location. NThe pure valuation is followed by a long explanatory report, often comprising more than 20 pages.
The property valuation process usually begins with the choice of method. The appraisals can be prepared according to the pure asset value based on the individual characteristics of the property or the possible income value. In the latter case, the valuer determines what rental income can be expected, for example. Comparative methods are also common, in which the property is compared with other buildings in the vicinity.
Many different factors influence the purchase price of a property, including the redevelopment notice or the location in a redevelopment area. The valuers will also include the following factors in the valuation:
- Market development in the region
- Condition of the building and equipment
- Year of construction
- Living space
- Construction method and degree of modernization
- Plot size
- Location of the property and popularity of the neighborhood
- Energy efficiency
Steps for determining the value of Berlin real estate
Depending on the reason for the property valuation – a wish to sell, inheritance, clarification of accrued gains under divorce law – the valuer decides on a valuation method in consultation with the client. If the property is to be offered to the public, for example, a comparison with similar properties in the same location makes sense.
The next step is to present all the necessary documents to the surveyor. He will now inspect the land register and visit the property. Once all the information on the location, the rights entered in the land register and the building fabric has been collected, further steps can be taken to determine the value of the property, namely the detailed assessment with explanations and evidence.
Investment opportunities in Berlin's redevelopment areas
Modernization continues in the capital, which is why there are many good investment opportunities in Berlin’s redevelopment areas. There are many opportunities for investors, particularly in Wedding, Neukölln and Pankow. Condominiums with good growth prospects can also be purchased in Neukölln. The investments are associated with various advantages.
First of all, you should find out exactly what construction measures are planned and whether they affect the property itself. If this is the case, you can claim a certain percentage of the expenses for construction measures against tax. The investments can regularly be deducted over several years.
The financial input can also be worthwhile in terms of the equalization levy, because in many cases, the more modern and lively a residential area becomes, the more can be demanded for the property when it is sold. However, it is important to bear in mind the speculation period of ten years.
The long-term value of properties in Berlin's redevelopment areas
Even if it is of course not possible to make 100% certain statements about price trends in the future, the long-term value of real estate in Berlin’s redevelopment areas is certainly positive. On the one hand, demand for living space is growing in general and, on the other, improvements in infrastructure and building fabric are almost always a reason for value growth.
Compared to already well-developed districts, the redevelopment areas still have potential and will be raised to a new level through modernization. At the same time, you must offset the potential increase in value against the additional investment in the redevelopment measures. You should therefore plan for equalization levies as well as any redevelopment costs you may incur.
The problem with the compensation payments is that it is almost impossible to predict how high they will ultimately be. The final costs here depend heavily on how much the city invests and what exactly is to be done. It is therefore important to consult a real estate agent about the situation at hand. They can explain the effects of urban renewal on property values in more detail.
Tips for buying renovated properties in Berlin
Properties that have already been renovated in a redevelopment area have the advantage that you no longer have to carry out any construction work yourself and, at the same time, prices are likely to rise in the long term due to the improved infrastructure. On the other hand, you will of course have to expect a higher purchase price if you opt for renovated condominiums or houses in Berlin.
Important tips for buying renovated properties in Berlin:
- A thorough inspection is particularly important for renovated apartments and houses and you should definitely consult an expert for this.
- Ask whether further restructuring steps are planned and check whether there is still a restructuring note in the land register.
- Hire a professional estate agent to draw up the valuation and prepare the purchase.
Sale of real estate in Berlin redevelopment areas
When selling property in Berlin’s redevelopment areas, it must always be made clear to the buyer what has already been modernized, what work is still pending and what costs may be involved.
However, the settlement amount can become a difficulty here. The potential buyer will initially look at the property value and base their decision on this. However, any compensation payment is usually not yet taken into account. If the prospective buyer learns about this, they may be put off and withdraw from the purchase.
A further hurdle is approval by the local authority. In redevelopment areas in particular, there are pre-emption rights in accordance with Section 24 of the German Building Code (BauGB) – this means that the Berlin districts can always claim priority as the buyer of a property in a redevelopment area.
However, if approval has been granted by the district administration, the property in the redevelopment area may be sold freely. An official appraisal of the property value can serve as a decision-making aid when weighing up whether or not to carry out and finance the redevelopment measures before the sale.
If you wish to carry out alterations as part of the redevelopment plan, you must always obtain approval. No essential changes may be made to properties in the redevelopment area without the approval of the district administration. Once the redevelopment is complete, you usually pay the compensation and have the redevelopment note officially deleted from the land register.
Following the refurbishment, the valuation usually results in a significantly higher property value. You can now have an estate agent draw up an offer and market the property. If a buyer is found, an appointment is made with a notary to conclude the property purchase agreement.
Conclusion on the performance of properties in Berlin's redevelopment areas
The purchase and sale of properties in Berlin redevelopment areas is accompanied by a number of special features that buyers and sellers should be aware of. These include the obligation to pay compensation for urban development measures. However, own modernization investments can be deducted from tax and the owner also benefits from the general increase in value of the property.
Redevelopment areas are always places where the municipality is working on upgrading and making the residential area more attractive. In addition to renovated facades and energy-efficient conversions, this also includes infrastructure expansion. It is primarily these changes that ensure rising property prices in the long term and therefore need to be taken into account when determining value. Potential buyers in Berlin’s redevelopment areas must therefore expect higher prices on the one hand, but can also assume that property prices will develop positively.
