Almost the same price per square metre, a very different rent

Most city comparisons run on portal asking prices, which measure what sellers hope for. This one runs on what was actually paid. Every property sale in Germany passes through a notary, and every notarized contract lands with the city's Gutachterausschuss, an independent official valuation committee that publishes the results once a year. This article puts the two committees' latest reports side by side: the Immobilienmarktbericht Frankfurt am Main 2025 and the Immobilienmarktbericht Berlin 2024/2025, both covering the 2024 data year with a first look at Q1 2025.

For rents, we use each city's official Mietspiegel (rent index) for 2024. Both are qualified rent indexes under §558 BGB, which means both are computed over the same statistical object: rents newly agreed or changed within the last six years. That makes the two headline means genuinely comparable, and the gap between them is the single most important number in this article.

One thing this article is not: a recommendation. It is a side-by-side reading of two official datasets, written for internationals weighing German cities, with every figure traceable to a public source. Educational, not advice. Where a figure is derived rather than published, we say so.

1. Prices: almost the same square metre

Berlin's committee publishes a single citywide figure: the average 2024 condo changed hands at €5,251 per m² of living space, about 1% below 2023. Frankfurt does not publish one all-in number, so we derived it: weighting the six build-year classes in the report's condo resale table (1,941 transactions) by sales volume gives roughly €5,560 per m². Treat that as approximate; the table excludes special types such as attic conversions and maisonettes.

A 6% gap is small enough that, for most buyers, price per square metre is simply not what separates these two markets. What separates them is everything that price buys.

2. Rents: where the two cities part ways

Here the same two official sources diverge sharply. Frankfurt's Mietspiegel 2024 carries a citywide mean of €11.50 per m² (official Gutachten). Berlin's Mietspiegel 2024 carries €7.21 per m² (mietspiegel.berlin.de). Both figures are the mean over the qualified rent-index sample, so this is a like-for-like comparison, not an artifact of methodology. Frankfurt additionally splits its sample: unchanged existing tenancies average €9.43, new and renewed lettings €13.05 (Journal Frankfurt); Berlin publishes no such split.

Divide price by rent and the picture snaps into focus. The average Frankfurt condo trades at roughly 40 times its rent-index annual rent, implying a gross yield of about 2.5% before any costs. The average Berlin condo trades at roughly 61 times, implying about 1.7%. Same asset class, nearly the same price per square metre, and a rent base roughly 37% lower in Berlin.

Two caveats keep this honest, one in each direction. First, Mietspiegel rents are index rents, not market asking rents; in both cities, and especially in Berlin, new lettings outside the index's reach (new builds, furnished lets) can run well above these figures, so the achievable rent gap on an actual re-letting is smaller than the raw 37%. Second, the regulated re-letting ceiling is anchored to exactly these index levels (more in section 7), so for the large regulated segment the gap is not just statistical, it is enforceable.

There is also a useful cross-check inside the two reports. For entire rental apartment buildings, both committees publish a price-to-annual-rent multiple, and the two cities are nearly identical: 23.2x in Frankfurt, 23.5x in Berlin across all locations, with central pre-1950 stock at 26.7x vs 25.8x and outer locations at roughly 20 to 23x in both. At the building level, professional buyers price the two cities almost the same. The entire divergence lives in the condo layer, which brings us to the next number.

3. The condo premium: what buying one flat costs over buying the building

Compare what a square metre costs inside a rental building with what it costs as an individual condo, in the same city, same year, same source:

Every condo market carries some premium over building value: a single flat is a smaller ticket, easier to finance, easier to sell. But the size of the markup differs a lot here. A Frankfurt condo buyer pays about 60% over rental-building value per square metre; a Berlin condo buyer pays roughly double. This is one of the least-discussed numbers in either report, and for a first-time buyer it is worth understanding before looking at a single listing: it is the price of buying the convenient slice rather than the whole cake, and Berlin's market charges considerably more for the slice.

4. Market size, liquidity, and the entry ticket

Berlin's market is not just bigger in absolute terms, it is bigger relative to its population. In 2024, Berlin recorded 20,789 notarized sales (+18%) worth €14.9bn (+20%); Frankfurt recorded 4,889 (+23%) worth €3.97bn (+19%). Condos dominate Berlin's market to an unusual degree: 16,631 condo sales made up 80% of all transactions, versus 2,831 and 58% in Frankfurt. Per 1,000 residents that is 4.3 condo trades a year in Berlin against 3.6 in Frankfurt.

For anyone thinking about an eventual exit, that liquidity is a real feature of the Berlin market: more buyers, more transactions, more price evidence, in every year and every segment.

The entry tickets differ too. New-build condos average almost exactly the same in both cities: €535,080 in Berlin and roughly €538,113 in Frankfurt (derived: €142.6m of turnover across 265 units). Below new-build, Berlin's report shows an average €439,656 for a resale condo, and a segment Frankfurt has no volume equivalent for: flats converted out of rental buildings, averaging €337,038. The lowest-priced meaningful entry point in either city, on official numbers, is a converted Berlin rental flat.

5. Districts: where each city is cheap, and how wide the spread runs

Both reports break condo prices down by district and build year, and the extremes are instructive:

Two details stand out. Frankfurt's cheapest districts are cheaper than Berlin's cheapest districts, in a city whose rent index runs some 60% higher. And Frankfurt's single largest condo segment by volume, 1950 to 1977 build-year stock with 778 sales, averaged €4,280 per m², which is below Berlin's citywide average. The wider spread means Frankfurt's citywide mean hides more variation in both directions.

6. Buying tenanted vs buying vacant

German flats sell in two states: vacant, or with a sitting tenant whose lease transfers to the buyer. Sitting tenants are strongly protected, so tenanted flats trade at a discount, and the size of that discount differs sharply between the two cities. For pre-1919 stock, Frankfurt's report shows €6,550 per m² vacant against €5,290 tenanted, a discount of about 19% (equivalently, vacant stock carries a 24% premium). Berlin's shows €5,767 against €4,034 for converted pre-1919 flats, a discount of about 30% (a 43% vacancy premium). Berlin's prefabricated Plattenbau stock shows the same pattern: €3,469 vacant, €2,834 tenanted.

Berlin's market, in other words, pays a buyer far more to take on a sitting tenant. It is the cheapest route into Berlin ownership on a per-square-metre basis. It is also not free money: the discount partly reflects that Berlin's regulated rents sit further below open-market levels, so the path from a tenanted purchase to a higher rent is longer and more constrained there. The discount is compensation, and the next section explains what it compensates for.

7. Regulation: the same rules, a very different bite

On paper, the two cities are regulated almost identically. The Grunderwerbsteuer (property transfer tax) is 6% in both Hesse and Berlin, and all-in closing costs, with notary, registry, and agent fees, land near 11% on both reports' assumptions. Both cities fall under their state's Mietpreisbremse (rent brake). Both require a permit to convert rental buildings into condos under §201a BauGB, with Berlin adding Milieuschutz (social preservation) areas where conversion is restricted further.

The difference is not the rules; it is the base they operate on. The rent brake caps a new letting at 10% above the ortsübliche Vergleichsmiete, the local comparable rent for that specific apartment, which is determined using the Mietspiegel. It is an apartment-level cap, not a citywide one, but the citywide means show the scale: 10% above Frankfurt's €11.50 mean is about €12.65 per m², while 10% above Berlin's €7.21 mean is about €7.93 per m². The same legal mechanism, anchored roughly 60% higher in Frankfurt.

Three carve-outs matter in both cities, and they matter more in Berlin because the regulated base sits lower. The rent brake does not apply to the first letting of a new build (first occupancy after October 2014), nor to comprehensively modernized apartments, and a landlord may continue charging a grandfathered prior rent that already exceeded the cap. This is why new-build and furnished segments in Berlin advertise rents far above €7.93, entirely legally, and why the gap between Berlin's index rents and its asking rents is unusually wide.

8. What neither city's headline yield tells you

The gross yields implied above, roughly 2.5% in Frankfurt and 1.7% in Berlin on rent-index rents, both sit below current German financing costs: investment loans run around 4 to 5% (based on Financemate's current customer financing data, for a non-owner-occupied investment loan), with the market-wide average for all new home loans around 3.7% (Hypofriend/ECB). Neither city, on official index rents, produces a purchase that pays for its own debt from day one. Anyone telling you otherwise is quoting asking rents, exempt segments, or optimism.

What changes the arithmetic, in both cities equally, is everything that sits outside the gross yield. Achievable rents on exempt segments (new builds, comprehensive modernizations, furnished lets) run well above index levels. AfA depreciation lets a landlord deduct 2 to 3% of the building value annually, with a 5% declining-balance allowance for qualifying new builds, sheltering rental income from tax. Mortgage interest is fully deductible against rental income. And a privately held property sold after ten years is exempt from capital gains tax entirely. How much any of this is worth depends heavily on your income, tax situation, and horizon, which is exactly why it belongs in a calculation rather than a headline, and why a Steuerberater should see your specific numbers.

9. Supply, distress, and momentum

Neither city is building its way out of scarcity. In 2024 Frankfurt permitted 2,039 new homes and Berlin 9,921, a 38% one-year fall for Berlin; per 1,000 residents that is 2.62 and 2.56, essentially the same shortfall. Frankfurt's report puts the city's annual need at around 4,000 homes (BBSR estimate); the residential building land actually traded in 2024, about 24 hectares, corresponds to roughly 1,140 homes, in the region of a quarter of that need. Berlin traded 115.7 hectares, down 22%.

The pipeline that feeds individual buyers is narrowing in both cities, from very different levels. Berlin converted 1,552 rental flats into condos in 2024, down 65% in one year; Frankfurt converted just 80, its seventh consecutive annual decline. Even after Berlin's collapse, that is roughly 400 conversions per million residents against Frankfurt's 103, four times as much new owner-occupier product per capita reaching the Berlin market.

Distress remains rare in both. Forced auctions numbered 41 in Frankfurt (down 16%) and 118 in Berlin (down 5%); per million residents Frankfurt actually sees more (53 vs 30). Early 2025 momentum favoured volume in Berlin, where Q1 residential transactions ran +26% year on year (condos +27% in both count and turnover), and value in Frankfurt (+10% transactions, +16% turnover). One background variable differs clearly: 2024 unemployment was 6.5% in Frankfurt against 9.7% in Berlin (Germany overall: 6.0%), a labour-market gap worth knowing about when your rental income depends on a single tenant's paycheck.

One last detail from the land-value tables, for readers who enjoy reading committees' minds. Adjusting standard land values to January 2025, Frankfurt's committee marked apartment-block land down 10% in every location tier and left single-home land unchanged; Berlin's did the reverse, leaving apartment-block land unchanged and marking single-home land down 5%. The two committees, looking at their own transaction evidence, moved opposite corners of the board.

10. What the data adds up to

No verdict fits both goals a first-time buyer might have, and the two reports genuinely point in different directions:

• Rent per euro of price is higher in Frankfurt. Around 40x rent-index rent versus 61x, a smaller condo premium over building value (1.60x vs 2.06x), a rent-brake anchor around 60% higher, and cheap districts that undercut Berlin's cheapest, inside a tighter labour market.
• Scale, entry price, and exit are Berlin's. Four-plus condo trades per 1,000 residents a year, 80% of a €15bn market in the asset class you would be buying, average tickets from €337k for converted stock, a deeper discount for accepting a sitting tenant, and four times the per-capita flow of converted flats reaching private buyers.
• The state takes the same cut either way. 6% transfer tax, roughly 11% all-in closing costs, the same rent-brake mechanism, the same conversion-permit regime, and near-identical building-permit rates per resident.

Which of those columns matters more depends entirely on what the purchase is for: cash flow, a first foothold, eventual resale, or simply a home. The honest reading of the two reports is that a Berlin buyer at the average is paying about 61 times index rent and roughly double rental-building value for the convenience and liquidity of that market, and a Frankfurt buyer is accepting a smaller, slower market in exchange for materially more rent per euro invested. Both of those can be reasonable trades. They are just different ones, and now you know the numbers behind each.

This article is for general information and comparison only. It is not financial, tax, or legal advice, and it does not recommend buying in either city. Figures are official 2024 data (with Q1 2025 where published) and may not reflect the current market; averages hide wide variation between districts, buildings, and individual apartments, and several district-level figures rest on small samples. Derived figures are marked as such. Tax effects such as AfA and the ten-year holding rule depend on personal circumstances; consult a Steuerberater for your situation.