Squatter's paradise to Millennial's dream: Berlin's real estate boom
Berlin, Germany (CNN)For decades, eastern Berlin was a low-cost haven for creatives like freelance filmmaker Katrin Rothe.
"I first lived here for free," Rothe said. "You didn't have to think about lifestyle and making money then."
That free-spirited vibe remains very much part of the attraction for the 40,000 or so new residents who move into the city each year.
Most of the new arrivals are millennials, attracted to the city's social energy and burgeoning start-up scene.
It's a buzz that's filtered into the real-estate market, according to property consultant Nadja Ivazovic.
"Ten years ago you could sell flats, but it wasn't like this great big hype on the city," Ivazovic said.
Prices for condos and multi-family housing have risen by 71% and 58% respectively since 2009.
Ivazovic started her own property consultancy in 2012 during the market's peak.
"I have the feeling now that everyone wants to come to Berlin and everyone is looking for high yields. But it's not easy to find it anymore," she said.
"People are trying to find the last pieces here to develop and sell it."
Crowds party in a popular Berlin night spot.
Ivazovic helped Jay Fegan find a one bedroom flat in Berlin for $360,000 two years ago.
Yet it's a very different city now to the one he first visited in the late 1980s.
"When I first came here, after the fall of the wall, there was so much devastation everywhere," Fegan said.
"Just see what is coming up around it -- the money and investment that has been brought into it -- it's got a real nice community feel to it," he added.
Since moving to Berlin in 2009, Fegan and two partners have bought over $6 million worth of investment properties.
Supply in the city ranges. There are high end residential blocks like "The Yoo," selling the likes of luxury penthouses on the market for a whopping $28,000 per square meter.
Such a property will likely appeal to "a director of a start-up company from Silicon Valley that needs to live here in Berlin," said Hans Peter Koopman, of investment and development firm Peach Property Group.
A renovated building in Berlin's trendy Prenzlauer Berg district.
Other new developments are more modest. "The Mile," a building along the central Chausseestrasse, will contain more than 270 affordable flats.
"A Space" -- a former factory close by -- is another development being transformed into 60 loft flats that are selling for $6,700 per square meter.
But in a city where approximately 80% of residents are tenants, rising rents are a concern.
Rothe had to leave her apartment of 16 years after developers bought the building she was living in.
She now wants people to be aware of the city's laws.
"We have very strong tenants rights, you can't be kicked out of your flat and rents can't increase," she said.
"The problem is now you cannot find a cheap flat anymore so people are really fighting for their flats."
It's a delicate balancing act.
One things for sure though -- whether resident or investor, demand for a piece of Berlin's property pie has never been higher.
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