There are a lot more nice places to live in Germany. Berlin is not that cheap anymore (wages in IT are probably half of that in the Bay Area). As more people move to Berlin, the costs of living will be more like those of London in 10 years from now.
Not necessarily. Rising prices in desirable cities is not a law of nature; it's a political principle, because most Western cities restrict development, leading to supply shortfalls and price rises. Edward Glaeser's The Triumph of the City describes both the political dynamics and their problems well: http://www.amazon.com/Triumph-City-Greatest-Invention-Health...
Having visited Berlin once, a couple of years ago. I felt that not being to speak German is less of a obstacle than in other German cities.
It's diminishing rapidly, however, I'm still typing this from 1600 square feet at what is the exact Berlin analog of 24th and Mission—for which I pay a completely mindbendingly outrageous-to-Berliners $2100 each month.
In four years it will be twice that, as it has doubled in the last four years. However, much can be built and done in that time.
Rent caps are one thing that is changing, also the real estate agent's fee must now be paid by the landlord (which is a great idea, why the tenant has to pay it seems crazy to me).
http://www.theguardian.com/world/2014/sep/23/germany-imposes...