Over wine and coffee in the Wilde Oscar restaurant, Peter Sibley and Gottfried Stecher are swapping stories of the bad old days when homosexuality was outlawed.

"I was a late developer, and didn't even learn the word 'gay' until I was 30," says Stecher, 84. "I only came to the slow realisation that I myself was [gay] because I knew it wasn't usual not to be interested in girls," adds the retired confectioner who now works as an extra at the national opera house, the Deutsche Oper. "I've spent most of my life being a lover to married men."

Sibley, 70, a former London theatre and music manager, says he had the fortune "of working in a profession where it was considered normal to be queer". Apart from his parents, he says, "I've lived with other gay people all my life."

They may have had different life experiences, but in retirement both men had a similar wish: to grow old in an environment in which they could be open about their sexuality.

Now neighbours, they are meeting for the first time in the plush restaurant on the ground floor of a revolutionary housing project both call home in west Berlin. In Europe's first multi-generational house for lesbian, gay, transgender and bisexual residents, Stecher has a two-room flat on the second floor, Sibley a single room in a fourth-floor flatshare.

"What all our residents have in common is that they wanted to live together with other gays and lesbians," says Marco Pulver of Berlin's gay and lesbian advisory service, which is behind the €6m project, Lebensort Vielfalt (Diverse Living Space). "Many of our older residents spent their youth and often a large amount of their adult life in gay-hostile environments.

"Several even experienced persecution under the Nazis, and all of them have been affected by Germany's 'paragraph 175'," he says, referring to the law that forbade sex between men and was not abolished until 1994.

"Now their priority is not to have to shy away from their sexuality and to certainly not have to worry about whether who is taking care of them, often in an intimate way, has a problem with it." There are more than 200 people on the waiting list for the home.

Pulver insists that although 60% of the space is reserved for men over 55, the project is far more than just a retirement home for men. Women, as well as younger men, live there too. The youngest is 31-year-old Robert Franke, an accountant at a local yoga centre, who says he jumped at the chance when he was told he could apply for a flat in the housing project.

"I lived in a commune with 24 others in a squat in the former East Berlin," he says. "When that broke up, I thought it would be nice to be a bit independent, but also to be in a well-defined community with other gay people."

Fifty-two-year-old Paul Welbourne, from Boston Spa, West Yorkshire, said: "I wouldn't idealise it – there are lots of challenges to living at close quarters and just because we're gay doesn't mean we all get on. But we plan to stick at it and hope to make it work."

The residents of Lebensort Vielfalt's 25 flats are also served by a concierge, and enjoy a library, a garden, and the restaurant, which doubles up as a theatre/cabaret bar for regular entertainment including a recent "gay not grey" fashion show, which was open to the public.

Sibley says the Berlin housing project saved him from "ending my days rotting in an anonymous old folk's home". Having recovered from the worst effects of a stroke last year, he set about trying to find suitable accommodation, helped by friends and the Terrence Higgins Trust in the UK.

"There was nothing comparable in the UK, so we had to look elsewhere. They're planning something similar in Madrid, but seeing as I have friends in Berlin, and it's easy for UK friends to fly over to see me, we decided upon this," he says.

Despite his ailments – he is reliant on a wheelchair – he views his situation with a healthy dose of humour. He draws on the daily encounters with his handsome, gay, Hungarian carer, trips to the local deli, the Scott Joplin piano concert he played when the project opened and details of life with his insomniac former opera-singing flatmate.

Friends have now encouraged him to turn his words into a blog, oldbuggerzinberlin. "There are days when I think 'get me out of here'," he admits, "but there are certainly far worse places in which to end up."