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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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It's become a classical proverb that finally you get what you're paying for. On the residential real estate market in Germany this proverb has many followers. To have an example let's look at the new capital city of Berlin. Rapidly you will realize that there are at least two instead of one market within the city, each with different price levels, dynamics and forecasts.

On one hand, we have relatively cheaper residential areas in the eastern parts of the city (former capital of the communist East Germany). Prices there are less than 1,500 EUR per sq.meter, in some properties less than 1,000 EUR*. But this fact doesn't attract new investors and these areas experience declining population even with the generous state subsidies and tax benefits in the recent years after the reunification of Germany. Former East Berlin has higher than average vacancy rate for residential properties (in the city in general this rate is 6-7 percent). More than half of the vacant 130,000 apartments (most of them are in the eastern parts) need renovation.

On the other hand, we have much more expensive locations in the southwestern parts of Berlin. But there the demand for housing by far exceeds the supply. The prices there reach 6-7,000 EUR per sq.meter (the average in the city is 2,300 EUR) but even this fact doesn't disturb the new buyers. It's obvious that this big difference in the prices exceeding 400 percent between the most and less expensive areas isn't on her way to disappear soon. On the contrary, the local experts expect new increase in this gap.

The same story we can find out on the rental market in Berlin. On one hand, we see contraction in the rents levels in the eastern parts, where the rents are the lowest in the city - 3.5 EUR per sq.meter per month. On the other hand, in the luxury locations with rents exceeding 20 EUR per sq.meter per month, we can note an annual increase of 4-5 percent.

Even if the population of Berlin is expected to shrink slowly in the next years, the experts don't see in general a slowdown in demand because the number of the households will remain stable as single households increase. Another thing stimulating demand comes from new immigrants who settle mainly in the big cities.

Compared to Berlin, in the other major German cities the residential market doesn't show such gaps in the price and rents levels. For example, in Munich the choice is between 1,800 EUR for sq.meter in least expensive areas and 5,100 EUR in the most expensive**. As for the rents, the difference is between 7.50 EUR per sq.meter per month and 15.50 EUR.

In Hamburg the prices are lower than in Berlin or in Munich - between 1,400 and 2,800 EUR. The rents though are similar to these in Munich - between 7 and 16 EUR per sq.meter per month. In the major European financial center of Frankfurt-am-Main the price and rent gap is even closer. The difference between the cheapest and most expensive areas is as between 1,800 and 3,200 EUR. In the meantime the monthly rents vary from 6,5 to 12.5 EUR per sq.meter.

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* Prices and rents are always in EUR ($1=1,15 EUR).

** Prices and rents are taken in average per area.

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See also the directory of companies providing real estate services in, and general real estate information of Germany.