Global cities: an interview with Berlin property insider Nicole von Klencke
An interview with Nicole von Klencke, owner-manager of Unusual Spaces, a Berlin-based real estate agency that works with discerning clients to find the right property for their specific needs.
1. What are your customers typically looking to buy?
Our customers want something special, so we offer only architecturally-interesting or exclusive properties with a fascinating history. Berlin’s 12 unique districts present a variety of urban character. Many clients want apartments in an exciting part of the city. For those looking for a family home, charming neighborhoods like Dahlem and Grunewald have a village atmosphere but are close to the city’s attractions.
2. What incites them to purchase?
The Berlin real estate market is ideal for property investment. Unlike mature London, Paris or Rome, Berlin is Europe’s teenager – rebellious and hip. Its culture, history, and diversity set it apart from the typical German city and its population is young and international. Most Berliners speak good English and the city is easy to get around and explore. It has no heavy industry, barely any pollution and a relatively low cost of living. Comparatively cheap commercial rents are attracting high-tech entrepreneurs and business start-ups.
Our clients look for both primary and secondary properties, usually for themselves and often with space for visiting family and friends. Many want to work and live in their new home. Berlin’s property prices are steadily rising owing to its increasing desirability, so many clients want to invest now.
3. Who is your customer?
As the only independent agent licensed in both Berlin and New York City, I can advise both international clients seeking properties in Germany and Europeans searching in New York. I continue to work as an associate with Brown Harris Stevens in New York. Many of our clients are in the art world and look for something unusual to fit their lifestyle.
Our typical client is a financially-secure, well-established professional, usually over the age of 35. Many are German but we serve clients from all over the world. Most are married, some with young children, but we also offer properties to suit the single lifestyle.
4. Is there a multiple listing service (MLS) in your market or do agencie otherwise cooperate to share listings with each other?
There is no formalized MLS in Berlin. Occasionally, I work with other brokers on individual properties. I often do this with furnished apartments and for exclusive rentals.
5. What percentage of properties are sold by owner vs. listed with an agency?
In our market of exclusive properties, approximately 80% go through brokers.
6. Who handles the legal aspects of the transaction?
The broker procures all contracts and agreements. A notary lawyer advises all parties on the legal aspects of the process.
7. How many agencies are there in your market?
There are hundreds of agents in Berlin. The trick is to find one that is recommended and has experience of advising foreign buyers.
8. What is the % of sales in existing vs. new construction?
I estimate that 60% of sales in Berlin are in existing construction. One of the first questions is whether to find a newly-constructed building or an ‘Altbau’. These highly attractive, pre-war residential buildings have beautiful large windows, tall ceilings, detailed molding, and many other charming features.
9. Are there rules limiting renovation or construction due to historic preservation?
Berlin strives to preserve its rich architectural history, ranging from prominent figures like Karl Friedrich Schinkel and Erich Mendelssohn, through Bauhaus constructions by Le Corbusier, to the villas in the Berlin Lake Districts. Strict laws prescribe what you can do to buildings designated city landmarks: most importantly, the façade must remain intact. Most of my properties are protected by historical preservation laws.
10. What is the average price per sq. ft.?
It depends on factors including location and type of building but a rough average for the city would be around 3,500 €/m2. Prices are increasing fast and in desirable areas like Prenzlauer Berg, Mitte and Charlottenburg they can hover around 7,000€/m2. An expensive new town house in Mitte can cost up to 10,000€/m2.
To compare with other cities: in Hamburg the average is around 3,800€/m2. In desirable areas it’s around 9,000€/m2 and exclusive new properties can cost up to 15,000€/m2. Munich is still the most expensive city: the average is 4,800€/m2, while prices in desirable areas the range is 6,500€/m2-15,000€/m2.
11. Are local and foreign buyers subject to the same laws and taxes?
With some minor variations, foreign buyers and Germans are treated alike with regard to real estate. They may also run into their home country’s tax stipulations.
12. What advice would you give a foreign buyer looking to purchase in your market?
Strike while the iron’s hot! Berlin is a vibrant city and an ideal place for a second home or property investment. According to analysts, Berlin is the 11th most influential city in the world among wealthy people for factors like economic activity, political power and quality of life. For foreign buyers investing in property, it’s crucial to find a broker who understands international real estate and can guide you through the process. They will advise you about the neighborhoods that are in fashion now – and in the future.
13. What is the typical ratio of bedrooms to bathrooms?
Every apartment has a master bathroom and a half-bath near the living area. For additional bedrooms there will be more bathrooms.
14. How many agents are involved in each transaction?
It’s not uncommon for one agent to represent both the seller and the buyer, but in other cases two agents are present.
15. Are there search agents in your market?
There are a few, but not as many as in London or Paris, for example.