The Wall and its impact on real estate prices

The country’s economy and the citizens’ economic situation was worse than expected. The neighboring countries in the West were much better off. Most organizations or factories that had not taken appropriate measures to prepare for this new situation were closing down. The transportation sector required a new infrastructure, similar to electricity, gas, and communications. The Government had to strongly intervene in the field of construction and real estate. By the end of 1994 this situation led to a serious economic crisis, 3600 businesses had to close down and unemployment reached never heard off levels.

Berlin, as usual, suffered the most. The capital that was erased after World War II, depredated by the Communist regime, was in need of massive investment to an extent that the Government could not predict at that stage. During those years, real estate prices in Berlin dropped by 30% , emigration figures broke records, the birth rate reached almost zero level, and investors took their business to industrial and modern cities such as Zurich and Munich. Berlin was left with empty properties, abandoned industrial land and apartments at extremely low prices that nobody was interested to buy.