Property buyers in Berlin have invested record amounts in 2017, even though fewer smaller apartments have been sold. The annual report of Berlin Property Assessment Board found that the rising population of the German capital, as well as the growing number of unlisted people looking for apartments, have boosted demand in the real estate market.

According to last year’s report, houses, flats and plots of land totaling 18.2 billion EUR (21.2 billion USD) were sold in Berlin in 2017, improving the record by 2015. Despite the high total property value, the number of homes purchased is lower than in 2016. This shows that residential property in the German capital is decreasing and its price is rising. Last year it posted a growth of 13%.

In 2017, over 25,000 apartments were sold in the city at an average price of 3,626 EUR per square meter. The most expensive apartment last year was sold for 8.5 million EUR and was close to the popular commercial Boulevard Kurfurstendamm.

According to the report, the average size of the purchased apartments has shrunk compared to 2016. This is due to rising property prices that make buyers look for more affordable and smaller apartments. The other reason is the increase in the popularity of so-called “micro-apartments” – an area of ​​about 20 sq m, which is often used by students.

The rising property prices in Berlin are beneficial to vendors, but they often turn into a hurdle for future buyers or tenants. Over the last few years, rents in the city have risen by 0.4%.

German Chancellor Angela Merkel has vowed to fight the rise in rental and home purchase prices, saying the government has earmarked 6 billion EUR for it. The funds will be used to increase construction projects for social housing and to help families build or buy a home.