"Bau Turbo": Housing Development Between Ambition and Reality

Berlin Housing Market 2026: Turbo On or Still Idling?

Berlin’s housing market continues to face familiar challenges in 2025. Affordable housing remains scarce, building permits take an extremely long time, and investors remain cautious. Although transaction numbers recovered slightly in 2024, with properties sold increasing by 18 percent and volume by 20 percent, there is still no sign of the hoped-for construction boom. The politically announced target of twenty thousand new apartments per year remains distant. In 2023, only about 15,965 apartments were completed, which was 7.8 percent fewer than the previous year. Berlin again clearly missed its target, and the outlook for the coming years is even bleaker. New construction activity has tended to decline since the 2019 peak of nearly nineteen thousand completions. While the city continues to grow and will need around 222,000 new apartments by 2040, many construction cranes are turning more slowly than expected.

Politicians and industry leaders are urgently searching for solutions. Two headline-grabbing hopes carry ambitious names: the Berlin Faster Building Act, which has been in force since 2024, and the nationwide Housing Construction Turbo Act of June 2025. Both promise to accelerate residential construction. But can a few legal paragraphs really speed up a system known for moving at a snail’s pace? This article offers a charming yet critical look at the state of Berlin’s residential investment market and asks whether the turbo is engaged or still idling.

Berlin Faster Building Act 2024: Turbo Idling?

The Berlin state government placed significant hope in the Faster Building Act. This extensive omnibus law, passed on December 5, 2024, amended more than fifty state regulations, from building codes to nature conservation and monument protection laws. The goal was to accelerate planning and approval procedures and establish residential construction as a predominant public interest. Deadlines for authorities were to be shortened, zoning plan procedures bypassed, and a permit fiction introduced. This was expected to help achieve the target of twenty thousand apartments per year.

Six months later, the reality is disappointing. The law has not produced any noticeable acceleration. A Berlin attorney analyzing the first six months stated that no real improvement has occurred. Expectations for faster approvals remain unmet, with no sign of a turbo. Some provisions even slow processes down. While departments must submit statements within four weeks, they may extend the deadline by another month and request additional documents. In practice, this leads to longer procedures as staff compensate for missing time with formal requests. There are also no clear guidelines for what constitutes a complete building application. Each district defines this differently, creating uncertainty and delays.

Structural issues intensify the problem. District offices face staff shortages and digitalization efforts remain slow. The law cannot conjure additional planners, and restructuring has even led to the loss of experienced staff to the Senate administration. Digital building applications remain far from routine, with many offices still using paper plans and analog coordination. As industry experts observe, the law has created more bureaucracy instead of speed. Some describe it as a well-intentioned but ineffective placebo.

Environmental organizations are equally displeased. NABU awarded the act the negative distinction of “Dinosaur of the Year 2024,” arguing that environmental protections and participation rights are being undermined. Yet apartments are still not being completed any faster. From a cynical Berlin perspective, one might say the law achieved the rare feat of disappointing both environmentalists and investors at the same time.

The Housing Construction Turbo 2025: Nationwide Restart With Momentum?

While Berlin pursued its own approach, the federal government also acted. The Federal Ministry of Building and the coalition introduced the Housing Construction Turbo Act in June 2025, intended to accelerate planning and approval procedures nationwide from 2025 onward. After long negotiations, the act passed the Bundestag and was approved by the Bundesrat on October 17, 2025.

On paper, the turbo is ambitious.

New Approval Culture

A temporary §246e BauGB allows municipalities to deviate from many building regulations for five years. A project may be approved without a zoning plan if no significant environmental concerns exist. A three-month review period is theoretically sufficient, and if no rejection is issued within that period, the application is deemed approved. This is a major shift, at least in theory.

Digitalization and Standardization

Building applications must be submitted digitally using standardized nationwide forms and binding deadlines. This is meant to reduce administrative burden and minimize coordination loops.

Densification and Conversion

Additions, attic conversions, and transformations of offices or commercial spaces into housing are to be simplified. New noise protection solutions allow for housing closer to commercial operations. Even areas previously considered unsuitable for residential development become more accessible.

Tenant Protection and Investment Incentives

As a social policy balance, the conversion of rental apartments into condominiums in tight markets remains restricted until at least 2030, protecting tenants but offering few new incentives for developers. The federal government expects more than 2.5 billion euros in annual savings for administration, citizens, and businesses through reduced bureaucracy.

While marketed as a major offensive against housing shortages, enthusiasm among practitioners remains limited. Industry associations welcome the initiative but quickly emphasize that this is not a construction turbo but a land-use turbo. Faster planning law does not guarantee more construction. Municipalities are not obligated to use these new provisions. Planning sovereignty remains local, meaning cities may apply the rules selectively. It is doubtful that Berlin authorities will allow complex projects to be approved automatically simply because the review period expired. Declaring applications incomplete could remain a preferred tactic to avoid automatic approvals.

Meanwhile, the underlying challenges remain. Germany faces a deficit of over 1.8 million homes. In 2023, building permits dropped sharply. Construction costs have risen by around forty percent since 2022, and interest rates have increased substantially. Many developments are no longer economically viable. Project developers face heavy pressure as financing gaps widen. Cost increases of up to thirty percent have derailed numerous projects.

Although prices for existing Berlin properties cooled in 2024, new construction is still far more expensive than acquiring existing stock. Investors find little incentive to build new when they can purchase existing buildings at lower cost while rental demand remains high. Rents continue to rise. Berlin saw the fastest rent growth nationally in 2023. Construction output, meanwhile, declined sharply. The number of completed apartments in 2024 fell by another 27 percent. This gap will become even more significant in the coming years as missing units fail to reach the market.

Impact on Berlin: Can the Turbo Ignite Here?

For Berlin, the combination of the Faster Building Act and the federal turbo brings both potential and uncertainty. The principles complement each other. Berlin has already removed some state-level barriers. The federal law adds further tools and pressures authorities toward digitalization and more standardized processes. Larger projects with political support could move faster if prioritized under §246e BauGB.

Yet Berlin has shown that legislation alone cannot solve implementation failures. Staff shortages in district offices persist. Without sufficient personnel, three-month deadlines may be impossible to meet. Authorities may reject more applications prematurely to avoid automatic approvals. Political considerations and community resistance still play major roles. Accelerated procedures often mean less public participation, raising concerns in a city known for its active civic engagement.

Investors should remain cautious. So far, no significant acceleration can be observed in Berlin. New construction numbers will likely remain low through 2025. Conversion strategies may be more attractive in the near term. Berlin has substantial vacant office space that could be converted into residential use with fewer procedural hurdles. Modernizations and additions to existing buildings may also gain importance.

For long-term investors, current market conditions may offer opportunities. Liquidity pressures on some owners could enable favorable acquisitions. In 2024, buyers and sellers increasingly met at more realistic price expectations. Should the turbo eventually produce results, those who invest counter-cyclically may benefit. Additional incentives, such as temporary reductions in property transfer tax, could further stimulate investment.

Conclusion: Turbo Yes, but Only With Fuel and a Driver

Berlin’s real estate market remains dynamic and complex in 2025. Policymakers acknowledge that faster housing construction is essential. Ambitious tools are in place with the Faster Building Act and the Housing Construction Turbo. Yet tangible results are still missing. The turbo is sputtering rather than accelerating. The reasons lie in deeper structural issues such as high construction costs, long lead times, and limited administrative capacity.

There are signs of improvement. If administrative modernization progresses and federal measures are implemented effectively, momentum may build over time. Market prices have stabilized, and Berlin remains an attractive residential investment location. Demand for housing continues to grow.

Creative solutions may offer the most immediate opportunities. Conversions, additions, and temporary uses can generate housing more quickly and with fewer procedural barriers. Investors willing to explore these paths may be among the first to benefit once the turbo gains traction. Until then, patience and healthy skepticism remain prudent.

Ultimately, construction happens on building sites, not in parliaments. As long as cranes remain idle, Berliners may need to rely on their characteristic humor. The coming years will reveal whether the turbo truly ignites or merely produces warm air. Until then, we watch the market with a smile, a wink, and the hope that the next property viewing might actually take place in a newly built, turbo-fast penthouse.