Berlin edges towards property boom second time round

Some of the cheapest housing of any major European city is attracting a wave of foreign buyers to the German capital, promising a new property boom after a false start after the fall of the Berlin Wall nearly 20 years ago.
Buyers from Britain, Scandinavia, Ireland and the United States are leading the rush to snap up flats in the once-divided city, making the 12 months up to November last year the busiest on the property market since World War II, estate agents say.
Foreigners were responsible for 70 percent of the transactions, the German federation of estate agents said, with Danes spearheading the march. The interest is so high that Danish estate agents have opened offices here.
One Danish agent, Esben Tjalvi, said Danes found the prices too good to resist.
"At 1,500 to 2,000 euros (2,200 dollars to 2,950 dollars) per square metre, it's up to four times cheaper than in Copenhagen and Stockholm," Tjalvi said.
"People are buying what they can't afford at home."
But private buyers alone do not account for the eye-popping 28-percent rise in turnover in the first half of 2007 -- that is thanks to the muscular presence of investment funds, once a rare feature in the Berlin property market, that are snapping up dozens of apartment blocks.
Cerberus Capital Management and Goldman Sachs' Whitehall fund have invested 2.1 billion euros since 2004.
"In Berlin, the price per square metre is one of the cheapest of any major city in Europe, including those in eastern Europe," said Andrea Magnoni, the Italian co-founder of the Valore fund.