Zu Hause

2009.08.27

The recession doesn’t seem to have greatly slowed the gentrification of the poor-but-central parts of Berlin.  From where I sit, I look across the Landwehrkanal into Reuterkiez, a rapidly trendifying area of new nightlife and newly annoyed neighbours.  Old Ecke bars are closing on a daily basis, and being replaced by the Berlin cliché of bar-galleries, replete with 1970s cast-off furniture and randomly exposed brickwork.

Gentrification is most visible in Berlin where the Wall left a swathe of open spaces, which have gradually been filled in.  Nearly all will be gone within the next five years, I would guess.  Below are a few snaps I took the other evening on my way into Mitte, mainly of the sites being infilled around where the upper part of Dresdener Straaße meets Waldemarstraße (still a blank patch on Google maps at time of writing).  Note the line of the wall, visible as a double line of cobbles across the road, in at least one of these:


Here’s what I thought had happened:  in the early 1990s after the wall came down, a huge amount of capital flowed into Berlin, invested on the assumption that the newly reinstated capital would grow significantly and become a bustling metropolis once again.  The big money went into office construction and such-like (see Potzdamerplatz in particular) but was later followed by lots of smaller investors pouring their Irish and Spanish euros / British pounds into buy-to-let apartment speculation.

Then everyone suddenly remembered that Berlin had no real industry anymore (east german industry had all closed by this point).  The only ‘industry’ to speak of was government, and even then most cicil servants still secretly lived in Bonn and commuted.  Berlin had spent lots of money on its new infrastructure but recouped not much at all through business tax, and is now very broke.

Some days, all the above seems to be true.  The Berlin government certainly is broke, and it seems that a range of terrible, lacklustre designs are waved through by planners on the basis that ‘anything is better than nothing’.  The ongoing development of the Media Spree has ground to a halt.  But no-one seems to have told housebuilders, who are carrying on regardless.  There still appears to be a steady stream of luxury apartments going up, at least at all points east.  Recession-proof Berlin?  Seems unlikely.

So I welcome comments from economists,  investors, planners, architects or builders who can explain this.  Are people moving from west to east because it’s cheaper?  Are people moving back in from surrounding Brandenburg, where they spread out to over the last two decades?  Or is it just my selective perception, where I spot all of the relatively small number of new buildings going up?  Do get in touch if you know the answer.

6 comments

  1. I too am amazed at the continuing pace of construction, particularly seeing as the participation by amateur british and irish investors must have disappeared, and they would have constituted an important part of the buy to let market. That said, a couple of sites did stop work or closed doors completely. Two examples of this are the fehrberliner hoefe, in prenzlauerberg, and the fellini residenz on Alter Jakobstrasse. The former seems to have simply been abandoned as the developer Orcos Germany is in serious financial trouble, and work was stopped on the latter last year; whether it has recommenced or not, I do not know.

    In some localized spots it’s easier o understand the growth. For example te are by zinnowiterstr. is about to be transformed by the transfer of several thousand spooks and their assistants in the new headquarters of the BND, if you haven’t found yourself on chauseestrasse recently, I suggest a look, as it must be the biggest building site in the city.

    Elsewhere it’s difficult to tell whether this is the tail end of the speculation that has characterised the last decade, whether there is a real invasion of rich western germans, or if it is driven by real prospects of economic improvement in the city. Regarding the last possibility, I can’t see what new business is emerging here that could supply people with the wages to drive such a process. In the buildings I know, a lot of people are having problems making ends meet and some are being evicted…

    at, September 11, 2009
  2. Thanks Alan, interesting thoughts. Saw the spy HQ site at Zinnowiterstrasse recently (at night) and looks huge – will definitely take a look at Chausseestrasse. Is it housing mainly (showing my ignorance here, my manor is Kreuzberg really).

    Jim

    admin, September 11, 2009
  3. A quick follow up. Today’s Morgenpost has an article about Orco, whose Fehrberliner Hoefe I mentioned above. Turns out that they have now sold off another development site, the Haus Cumberland on Kurfürstendamm, for 30 million euros. They originally paid 40 million for it, so including interest etc. they have taken a serious loss on the deal.

    Their other major site in berlin lies on Leipziger Strasse, not far from Potsdamer Platz, pedestrians can see their huge billboard by the site with the slogan “Here is the new heart of Berlin or some such”. Following the other disposals there is doubt as to whether this development too is to proceed – the site was originally purchased for 75 million.

    cheers,

    A.

    at, September 27, 2009
  4. Thanks Alan, more useful info. Clearly things are not going that well at all – perhaps the development that I’ve noticed is the exception rather than the rule…

    J

    admin, September 29, 2009
  5. I don’t think much has changed really. The Berlin dilemma that started in 1945, carried on through West Berlin times, is that the city doesn’t really have a purpose. Yes, the government is here. But the real makers and shakers aren’t – they may have a ‘dependance’ here, but where are they at Christmas or in the Summer? – certainly not in Berlin.

    The federal system of government (of which I generally approve) as well as the cold war, moved the money to Frankfurt/M and the wealth to München and Stuttgart. All of these can be found rolled into one in London or Paris. That’s the difference.

    To me, ‘Ganz Berlin’ has become what West Berlin was – a sort of wild west town – inhabited by those that who are convinced that they made the right decision to move here (and continually let it be known) or those that can’t afford to get away. Probably a city mostly full of those who ‘don’t fit in’ .

    In M, S or F, no one needs to harp on about how ‘Weltstädtische’ their hometown is – they know. Take a look at many foreigners (with dosh) have these as their homes -many more than in Berlin..

    And yet, Berlin is a wonderful place to live, especially in summer, continually renewing itself, but never achieving the 100% perfection that ‘most’ Berliners and Germans crave..
    A bit like a once rich & beautiful woman, destitute, lost her teeth, but still with the capacity to entrance.. I love it and hate it..

    IsarSteve, October 21, 2009
  6. There is a trend for having secondary homes in Berlin. Apparently pensionieers are buying appartements in Berlin, as they, too, discover that this is a city with a lot of things going on – and thus a nice place for retirement. And compared to other – German – cities, Berlin housing prices are still modest (in most places). So this might also be a reason?

    red adventrice, October 22, 2009

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