The European destination Australians are being priced out of

Coco Daro, a 20-year-old Australian who recently moved to Berlin to follow her passion for dance, underestimated the challenge of finding an affordable place.

“At one point, I kind of ditched my original budget, because it wasn’t really possible to find something that cheap,” she tells Central News.

“The key thing was finding a place in the right area because it’s such a big city and I didn’t really want to travel an hour a day, going every single day to the school I’m studying at.

“It’s amazing to come here and follow your dreams, but I didn’t realise how hard it was going to be.”

Coco Daro in Berlin. Supplied.

Her initial budget was 400 euros a month but she had to settle for a room in a share house at 550 euros a month instead.

As a full-time dance student, it will be tricky for Coco to juggle her studies and find enough time for a mini job. Even then, she can only earn up to 450 euros a month (otherwise she has to start paying social insurances).

Berlin attracts around 40,000 new residents each year.

But according to the Berlin real estate firm Guthmann, the city is short of 200,000 apartments, meaning there is a serious supply and demand issue.

A HOUSING CRISIS?

Berlin’s charm and reputation as an affordable city has been tarnished by soaring rental prices and apartment shortages.

In the past five years, the cost of renting an apartment has increased by 42 per cent, placing Berlin in first place for the fastest rising rent out of 80 major German cities.

“The market power of profit-oriented investors in the city has become too great,” says Wibke Werner, the deputy managing director of the Berlin’s Tenant’s Association (Berliner Mietenverein).

Berlin’s biggest private property company, Deutsche Wohnen, owns more than 110,000 apartments in the city.

The shareholder’s valuation of Deutsche Wohnen increased by 22.6 per cent for the 2020 calendar year and significantly outperformed the DAX (German stock market), consisting of the top 40 German companies, which only achieved an increase of 4 per cent over the same period.

“The housing supply has to be understood more as a service of general interest, which has to be handled carefully and which is not there to serve any shareholders,” says Werner.

Berliners are frustrated by private property companies that own 37 per cent of the rental market.

In a bid to tackle the city’s housing crisis, renters have united to support a radical initiative that would see the compulsory purchase of 240,000 properties from landlords and return them to the city.

Anyone who has either moved to Berlin or has tried to find a new apartment knows that when someone says, “good luck”, they really mean it because you’ll need it.

This has been the case for Lucas de Boer who moved with his young family across the globe to start a new life in Berlin.

In the space of three years, the family of four moved eight times before finally securing a long-term rental apartment just after the first lockdown last year.

Supplied by Lucas de Boer

The 35-year-old Australian who works for a tech company in Berlin says he could “charitably” describe the apartment searching experience as “horrific”.

“It was one of initial optimism, followed by sort of a long, slow decline and a sense of hopelessness,” de Boer says.

“Apartment searching needs to be close to a full-time job.”

The length of their stay at each apartment was limited to a matter of months before they had to move along to the next one; their longest stay was just under a year.

“The constant pressure in the back of your mind was, don’t settle in, don’t get used to it, we’re going to have to move soon and that impacts every other area of your life,” he says.

Another challenge was the physical move itself which cost time, money and energy.

“Many Berliners have difficulties to find an apartment and to pay for their apartment which is also related to the fact that the income situation of Berliners is not so rosy,” Werner says.

A study by the Humboldt University of Berlin in association with the Hans Böckler Foundation found that of the 8.4 million households who rent in Germany’s 77 major cities, almost half spend more than 30 per cent of their net income on rent.

A quarter of the households in these cities spend more than 40 per cent of their income to pay for rent and utility costs.

“You just have to keep an eye on these people, all in all it’s a very difficult situation,” Werner says.

I can’t afford a single apartment here unless I find somebody that is going to give me the same contract from 10 years ago.

Aspiring artist, Andrea Rausa packed his bags and left Rome, the city he had lived in for more than 20 years, in search of creative inspiration as part of Berlin’s artist community.

Supplied by Andrea Rausa

He found that in one of Berlin’s hotspot areas, Kreuzberg: a mix between run-down, edgy and hipster with street art, a diverse cultural scene and trendy cafes and bars at every corner.

For the past year, Rausa and his nine-year-old daughter have lived in a share house but now it’s time to find an apartment for just the two of them.

“I can’t afford a single apartment here unless I find somebody that is going to give me the same contract from 10 years ago,” the 47-year-old says.

Rausa thinks he will have to farewell his beloved neighbourhood and “reorganise my [his] life”.

“What I will lose for sure is that sense of community that I have here,” he says.

He still wants to live within the very popular ring; the train line that forms a ring around the inner-city.

“That’s the problem, everybody wants to stay in the same places within the ring- so there’s a huge demand over a very small piece of Berlin and if you’re an artist, it’s even smaller,” Rausa says.

Rausa is one of many who will have to leave his neighbourhood to find an affordable place as rising rent and apartment shortages push people to the outskirts of Berlin.

84 PER CENT OF BERLINERS RENT

“The supply must be expanded. The influx to Berlin will certainly continue,” says Werner.

“Currently the mixture between rich, young and old, not so rich and artists is still there but under great pressure.”

Andrea Wesson, 59, is a true Berliner, growing up in the city when it was divided by the wall and there when it fell.

On her Saturday afternoon walk, it’s not unusual for her to see big lines in front of apartment blocks with up to 15 families waiting for an apartment inspection.

When her husband passed away in March last year, she no longer felt comfortable and was unsure whether she could finance her 115-squared meter, four-bedroom apartment with a garden and balcony.

Supplied by Andrea Wesson

“When you walk through the streets, often there’s little papers on a tree or lamppost where it says, a young family with two kids is looking for an affordable place,” she says.

“I had this idea, maybe I should swap with a family. I heard that a lot of families are looking for bigger flats.”

With a contract from 2007 and a four-bedroom apartment located within the ring for just 1065 euros, it took only 10 minutes before Andrea was swamped with requests after uploading photos of her apartment to Tauschwohnung (an apartment exchange platform).

Wesson visited 12 families who were very eager to swap with her considering the price.

The average monthly rent today for a three-bedroom apartment within the ring is 1,945.81 euros

“What I found was, either these flats were in a very, very bad condition like the bathroom hadn’t been renovated for 20 years or the rent was higher for a two and a half room flat than my four-room flat,” she says.

“Every time I had to say, sorry, but it’s not what I wanted, or it’s expensive, I always saw this big disappointment in their eyes,” Wesson recalls.

She decided to stay in her apartment because she couldn’t find anything within a reasonable price range or in good condition.

“The idea cannot be that I pay more and get less,” Wesson says.

WHAT’S ALL THE FUSS WITH BERLIN?

Ranked as one of the Top 20 Most Liveable Cities

Berlin has been included in Monocle’s Quality of Life Survey 2021 – coming in at #14, just above Amsterdam at #15 and behind Sydney at #10.

“Berlin is currently still a very colourful city,” Werner says.

“People like to come to Berlin to live here because of the living conditions which are very favourable compared to other metropolises, in other cities and other countries.”

De Boer and his wife thought they would return to Berlin after feeling so comfortable in the city during their travels over a decade ago.

“We started to think, could we live there, could we make that change, and then the more we talked about it, the more realistic it seemed and eventually, we just decided to bite the bullet and make the move,” he says.

“The attraction of Berlin was a sense of freedom, you know, more accommodating and sort of open minded place to live in, place to raise children,” de Boer added.

Adonia Barrie, a 23-year-old Australian, realised during her high-school exchange to Germany she wanted to live in Berlin one day, after visiting the city most weekends.

She has now lived in the city for three years with her boyfriend.

“I just had a better feeling, it felt like it suited me better, just the people and the weather,” she says.

Supplied by Adonia Barrie

THE SOLUTION

There’s many approaches to fixing Berlin’s housing crisis, however there’s no one simple solution.

One possible solution was the ‘Mietendeckel’, Berlin’s rent cap, which aimed to stop increasing prices by limiting how much landlords could charge.

In April, it was declared unconstitutional.

As a result, most tenants had to repay the money they saved from the rent cap.

Michael Melchner, owner of an electronic music label, knows the joy that came with the rent cap and disappointment when it left.

“I suddenly had to pay 170 euros less a month, so I was like, wow, that’s amazing, that’s the price of my studio,” he says.

Melchner says the removal of the rent cap “hit hard”.

In 2019, the number of apartments completed in Berlin reached a record-high of 19 000.

“The problem is that many apartments in new construction are still expensive so building alone cannot bring relief,” says Werner.

“There has to be cooperation with investors orientated toward the common good, who are also prepared to offer some of their apartments in an affordable segment,” Werner adds.

At the same time, she says “landlords also have to earn money – everything has to be in balance.”

Deutsche Wohnen says they recognise their responsibility within the housing market as Berlin’s largest private housing company and agreed to a “Future and Social Housing Pact” with the state.

“We do this by stepping up our commitment to new construction, limiting rent increases in the coming years, promoting housing for young families, and supporting the prevention of homelessness,” says Laura Kruß, spokesperson for Deutsche Wohnen.

While the Berlin Tenant’s Association mostly supports Expropriate Deutsche Wohnen, Werner says there are pros and cons to the initiative.

“The idea that more housing must once again be in public hands, in order to restore a balance in the political negotiating power is the right approach,” she says.

At the same time, Werner is “divided” about whether expropriating big landlords’ housing units is the right approach.

“Companies have to be compensated at great expense. It all costs a lot of money.”

The initiative has made it clear that the Berlin Senate must deal with the issue.

“Anything else would be a snub to the people of Berlin,” Werner says.