Berlin has always been home to large numbers of foreigners. Since the late 1700s, when Frederick the Great repopulated war-wracked Prussia with French exiles, the city has been made up of nearly one-third non-Germans (apart from in the Second World War). The aberration of 1933-45 became exaggerated during the Cold War when few tourists visited, and only draft-dodging West German males settled in, the city. Property prices stayed low because of the lack of industry, because of wildly liberal tenant rights and because of the unwelcome presence of 20 divisions of the Red Army.
Now fast forward to Berlin 2012, the hippest place to be cool and penniless on the planet. Foreigners are flooding into the once-divided city at the same time that property prices are increasing. As a result many long-term residents (most of whom moved here themselves in the 1970s) are up in arms. Last year a ‘Free Neukölln’ video raged against foreign students, ‘layabout international artists’ and gentrified hipsters who – it’s claimed -- are to be blamed for the change.
According to Die Zeit, rents in Neukölln rose over 23% between 2007 and 2010, the biggest increase in the whole city. Plus a new study by the Institut der Deutschen Wirtschaft calculates that property prices in the capital have risen nearly 40% between 2003 and 2011. As house prices fall around the world, they are on the rise in Berlin.
But as Jochen Hung pointed out in the Guardian last month, it is the international financial crisis, triggered by the collapse of the US housing bubble, that has led to Berlin’s property boom. As Hung wrote, ‘Germans who normally would have invested their savings on the stock market are now putting their money into relatively secure real estate. This run on property is fueled by historically low interest rates.’
In my part of town Mercedes-loads of middle-aged Germans roar in from Frankfurt and Düsseldorf to buy apartments as pied-à-terres, for investment and – more often than not – for their sons and daughters. Their eagerness to invest is pushing up prices and squeezing out long-term residents, much as happened 20 years ago in London’s Notting Hill when Rastafarians were bought out by the family-moneyed ‘trustafarians’
Canny foreign investors (with a few hundred thousand euros to spare) are also in on the act of course. As Hung points out, ‘in their yearly forecast published in February, the self-styled “wise men of the real estate industry”, an expert council of economists and analysts, glowingly reported on Germany’s status as a “safe haven” for international property developers.’ But it is erroneous to blame foreigners for the consequences of economic downturn and globalisation.
In any event, open borders necessitate open minds, and immigration changes the host country or place. Berlin is no longer an isolated island of rioting squatters, Stasi informants and crumbling infrastructure. All of which is leading the city to be – at long last – a truly international town.