Berliners are worried. For more than two decades, they have lived in the least expensive capital city in Western Europe and one that has been at the cutting edge of alternative culture.
Berlin's "coolness" and bargain prices are not unrelated: With low prices for real estate, particularly in postcommunist East Berlin, came an influx of artists, bar owners and restaurateurs, and finally, cool kids, not only from other parts of Germany, but from around the world, who descended on the city to eat up its culture. Berlin's relative homeliness, as compared with other European cities, became an advantage in an age of irony and nostalgia.
But the low prices that keep Berlin cool are rising. The European financial crisis has sent rents soaring. Last year, real estate prices jumped on average about 20 per cent in the city's central neighbourhoods. That number is expected to climb, as the euro zone debt crisis has pushed foreign investors, such as Greeks and Italians, to put their money somewhere safe – namely, Berlin real estate. With property prices climbing, the price of goods, drinks and entertainment goes up with it. This year, may be the last chance to enjoy Berlin as a hip affordable European capital.
Mitte is where every visit to the city should begin and where Berlin's tumultuous history from Prussia to Nazism to communism played out. But Berlin's real treasures lay just outside the centre, where the city's post-historical period unfolds.
I start my day in Prenzlauer Berg, the prettiest part of East Berlin and the first suburb to have gentrified. The gentrification was so swift that 80 per cent of preunification residents have been displaced since 1989 because of skyrocketing rents.
My first stop is the Barn, a charmingly pretentious coffee shop that has banned not only computers and tablets, but also baby strollers. If you happen to be in Prenzlauer Berg on Sunday, the farmer's market at Kollwitzplatz has some of the best grilled mackerel to grace a picnic table. Alternatively, the Sunday brunch at the Russian restaurant Pasternak is luscious and a steal at €13 ($18) all-you-can-eat.
Sundays are also a perfect time to see the giant flea market at Mauerpark. A Berlin ritual, Mauerpark attracts thousands every Sunday to browse endless stalls, eat grilled sausages and listen to ear-piercing karaoke in the "bearpit." The latter gets going around 3 p.m. and is the most bizarre but often rewarding free entertainment in the city.
Any other day of the week, I head to Neukolln, formerly part of West Berlin and not long ago considered one of the most dangerous and derelict parts of the city. Things have changed and the neighbourhood is now Berlin's cutting edge of cool. Prices there are rising fast, though, and Neukolln's reputation as the city's hippest 'hood won't last much longer. A remnant of the area's heavy immigrant background is Rissani, a bustling Middle Eastern restaurant that serves towering plates of hummus, falafel, shawarma and delicious fried halloumi cheese for €5. Nearby, Huhnerhaus, a takeout shack for slow-roasted chickens, sells huge portions for tiny prices.
Take your plate of chicken to Gorlitzer Park just next door and picnic on a grassy knoll. Gorlitzer Park has been described as the "anti-park." Despite the graffiti and lingering young men asking you suspiciously if "you're okay?" the green space is a treat to relax and enjoy the sun or enjoy a drink on the terrace of Das Edelweiss.
I've recently come to love spending afternoons at the community gardens at Moritzplatz. Not only do they serve a shockingly cheap and delicious lunch – a few weeks ago I had smoky chocolate chili with vegetables for about €5 – but it's also a great place to pull up to a table of strangers and join in a game of cards. The Prinzessinnengarten's mission is sustainable food and urban improvement and it's striking to see such an open community space free from development in the centre of a major European capital. While sipping fresh mint lemonade on a warm and sunny day in the garden, I couldn't help but wonder when someone would decide that this prime land would make the perfect condominium tower.
To sample classic German food – apart from the ubiquitous but flavourless currywurst – Spatzle and Knodel in Friedrichshain is the closest thing you're going to get. The gastropub serves spatzle – a kind of German mac and cheese – and an excellent wiener schnitzel for just over €10 – a bargain compared to what you pay in Vienna or other parts of Germany.
Nightlife in Berlin is bewildering given the vast amount of choice. There is no single neighbourhood to head out to but rather a number of areas catering to any taste scattered throughout the city. The area around Schlesisches Tor offers some of the cheapest bars in abundance. A local favourite is Madame Claude, a basement bar with furniture hanging off the ceiling and an international crowd. Although probably the cheapest bar in the area, Madame Claude co-owner Julien Bouille told me recently that he would have to raise the prices of drinks very soon due to rising costs. Wendel bar offers minty and very alcoholic caipirinhas made by real Brazilians. If it's warm, head to Club der Visionaere, just down the street on a barge floating in the canal. The outdoor bar and dance floor open till very late and, like most Berlin bars, is not pretentious. Don't forget to line up for an excellent burger at the end of the night at Burgermeister, housed in a former public toilet.
Over drinks with a friend and native Berliner a few weeks ago, he told me he'd bought an apartment in trendy Kreuzberg. His motivation? Bargain-basement Berlin wouldn't last much longer.
IF YOU GO
What to see:
Topography of Terror A stunning museum that brings home the horrors of the Nazi secret police that terrorized Germany. Niederkirchnerstrasse 8; topographie.de
DDR Museum A bizarre collection of relics from communist East Germany from the Trabant to living room furniture. Karl-Liebknecht-Strasse 1; ddr-museum.de
Holocaust Memorial Wander through the nearly 3,000 concrete slabs that are meant to provoke feelings of isolation and reflection. Cora-Berliner-Strasse 1; stiftung-denkmal.de
Eastside Gallery The largest, most impressive remnants of the Berlin Wall covered in paintings and murals. Muhlenstrasse; eastsidegallery-berlin.com
Sanssouci Park and Palace The former summer palace of Frederick the Great that can easily be reached by metro from the city for a half-day stroll in the park. An der Orangerie 1
Where to stay:
Casa Camper A clean and cordial boutique hotel in the centre of Berlin with one of the best restaurants in the city, Dos Palillos, on the ground level. Rooms start at $280. Weinmeisterstrasse 1; casacamper.com/berlin
The Circus Hotel Helpful staff, central location and great value make this one of the most popular places to stay in Berlin. Rooms start at $120. Rosenthaler Strasse 1; circus-berlin.de
Die Fabrik A funky, alternative hotel in Kreuzberg in an exciting area near the city's best bars and nightlife. Rooms start at $70. Schlesische Strasse 18; diefabrik.com
Where to eat:
The Barn When you think about Germany you think strict and this place is. Fortunately, it also has the best coffee you'll ever taste – just never ask for sugar. Auguststrasse 58; www.thebarn.de
Café Fleury Unpretentious French brunch and breakfast are the highlight here in this cozy spot between Mitte and Prenzlauer Berg. Weinbergsweg 20
Pasternak This is the place to try Russian food in Berlin and the brunch is heavenly and well-priced. Knaackstrasse 22-24; restaurant-pasternak.de
Prinzessinnengarten Under fire from authorities, this community garden and café deserves to be preserved and celebrated. Moritzplatz; prinzessinnengarten.net
Rissani Fresh and easy lunches of hummus, schawarma and friend halloumi. The lentil soup is also excellent. Spreewaldplatz 4-6
Huhnerhaus Lineups of hungry people wait day and night for cheap but amazing roasted chicken. Gorlitzer Strasse 1
Das Edelweiss In the centre of Gorlitzer park, this place is at once a bar with a great patio and a restaurant with a seasonal menu. Gorlitzer Park; edelweiss36.com
Spatzle and Knodel This is the best place to sample real German food such as spatzle and schnitzel – just don't tell the Viennese. Wuhlischstrasse 20; spaetzleknoedel.de
Lavanderia Vecchia The city's best Italian restaurant and an exciting culinary journey both at lunch and dinner. Flughafenstrasse 46; lavanderiavecchia.de
Burgermeister The best burgers ever cooked from a public toilet. The long lines are worth the wait. Oberbaumstrasse 8; burger-meister.de
Wendel A popular cocktail bar that does perfect and powerful caipirinhas. In the afternoon, it's a lovely café. Schlesische Strasse 42; nstp.de
Madame Claude A quirky French-owned bar with furniture hanging from the ceiling and cheap drinks. Lubbener Strasse 19
Fuchsbau A smoky candlelit bar that is hugely popular at the moment for its cocktails. Planufer 95
Club der Visionaere An open-air bar on a barge that picks up late at night. Am Flutgraben 1; clubdervisionaere.com
Witty's If you must try a currywust, this stand in Tiergarten is the best of the best and it's all organic. Wittenbergplatz 5; wittys-berlin.de