Imagine a land where rent and beer are commie cheap, where everyone gets up for breakfast at lunchtime, where the party never ends and where office enslavement and mortgage repayments are but scars of the past. Oh, and where all your neighbours are cool, clever, creative and beautiful.

Pinch yourself. Then get to Berlin. In the disused industrial spaces of the former communist East Germany, a raft of cultural trailblazers, among them the artist Olafur Eliasson, the electroclash musician Peaches (that’s Peaches the original) and even Brad and Angelina, are setting up home. Predictably, the brands are following: Soho House, the Hospital, the record label Vinyl Factory and the gallery Haunch of Venison are all buying up the cheap vacant buildings, with real estate costing £42,000 for 100 square metres. Even the city’s fashion students can afford to open shops.

“It’s like New York in the 1980s; Hoxton in the 1990s,” squeal the new Brits, who now number some 10,000. The cliché is that they came for two days and stayed for three years, infected by the “Berlin daze”, as the intoxicatingly cheap and hip living is known. The squat parties that rocked the wasteland after the wall came down have given way to East Berlin’s second wave (and keep it East – West Berlin is for squares). Modest gentrification has led to galleries doubling up as branding companies, photographers as film-makers and graffiti artists as graphic designers.

THE INTERNATIONAL COMMUNITY

Artists land in Berlin from all over the world. “It’s an international dumping ground,” says the architect Sam Causer, 32, who moved to Berlin two years ago with his collective, Pankof Bank (note: being part of a collective is essential in Berlin). “Newcomers are welcomed by fellow Brits, Danes, Swedes, Italians, Spaniards. We settled in easily – nobody is an outsider.”

Language isn’t an issue, either. “You don’t have to speak German here,” says Caroline Hayes, 34, who emigrated in 2005 to set up her DJ booking agency, Spun Out, after falling in love with the lifestyle. Well, not in the hip, international neighbourhoods of Mitte, Prenzlauer Berg and Kreuzberg, anyway. “There’s been such an exodus to Berlin that it’s like being cocooned in an idyll,” says Hayes.

MENTAL SPACE

The video-art duo Alex Large and Liane Sommers, both 33, have lived in Berlin since 2000, and have directed music videos for Mika, Scissor Sisters and Bloc Party, among others. They find Berlin’s easy living conducive to creating mental space. It’s not just the slow pace of life – there is much less traffic, advertising and noise in Berlin’s wide, sparsely populated streets. “In London, you’re constantly processing images,” says Sommers. “Here, we can stretch out and focus more.”

For the artistic temperament, head space can be all-important. “Before I came to Berlin, I didn’t know what I was,” says the electro-glam-rock-hip-hop musician Planningtorock (Janine Rostron). She arrived in Berlin six years ago with a bunch of other artists, and is now about to release her second album. “Being in Berlin has allowed me to grow creatively,” she says. “Very quickly, I met amazing musicians who were creative on their own terms. That was really inspiring – in other cities, you have to compromise. This city has a strange energy that’s there for the taking. I don’t think I would have made it if I’d stayed in London.”

CASH-POOR, TIME-RICH

Of course, it helps if you’re unleashed from the demands of a day job – just a couple of bar shifts a week takes care of the rent. In fact, nobody in East Berlin has a job; they just do “projects”. “The low living costs liberate you,” says Causer. “And, because nobody has a job, there is always a pool of people to hold a flag out of a window if you want to photograph it.” Or to hand themselves over to hedonism. Causer and co set up the Pankof Bar in the basement of their apartment. “We had loads of vodka left over from a house party, so we opened the doors, put a sign up and called it a bar. It was a constant party.”

And so resourcefulness and experimentation reign; commerce and branding give way to character and originality. New Berliners buy thrift by the kilo, and bars and cafes are full of shabby curios and salvage chic – think childish ladybird tablecloths nicked from family kitchens and bed pillows as scatter cushions. As Daniel West, a 25-year-old British journalist and now curator (just because he can), says: “We’re still materialistic, but it’s a different kind. It’s about weird little objects.”

COLLABORATION

The lack of cash encourages a socialist-style sharing mentality, and collaboration is a key element of Berlin’s social interaction. “It’s not that the people are necessarily nicer than in London,” says West, “but Berlin brings out the best in them.” And so there are free weekly meals put on by friends, a free artists’ hostel, and weinerei – cafes where you pay what you can afford. Even the ping-pong is for all: see a game and just join in, even if there are already 15 people running round the table. “Berlin is very easy-going,” says Hayes. “Anyone can make a start here.”

PERSONAL FREEDOM

With personal freedom high on the agenda, residents describe Berlin as a bohemian paradise. “Nights and days can take any direction,” says West. “You don’t have to be sensible. It’s got that kinetic energy of the fin de siècle.” Berliners even claim a specially high standard of sex for themselves, too. When asked what he would miss most about Berlin, the French hairstylist Charlie Le Mindu, 21, says: “Sex – Berlin sex is great.” Public nudity is de rigueur, the mayor is out and proud (the gay club Panorama was even given public funding), and there’s no rushing home to make the last train. Berlin’s long legacy of night culture has it, ahem, all in hand.

Evidently, it’s also a good place to procreate: Prenzlauer Berg is Berlin’s nappy valley. “I keep thinking I’m going to get thrown out for not having a small child,” quips one resident, the Brit DJ Ewan Pearson, 35. The city’s ex-Soviet social infrastructure facilitates life for working mums, with full-time kindergarten available for kids from one year old at an income-related rate.

TROUBLE IN PARADISE

But, of course, where there is paradise, trouble follows. Thus, the Berlin daze can become the Berlin drift, where “freelancers” float through the cafe culture and never-ending weekends without purpose or pay packets. “Berlin is the graveyard of ambition,” say the locals, or: “You’re a yuppie if you get one thing done a day.” Doesn’t anyone have anything to do? A lot don’t. “You do meet some off-the-rails party types who have been here for a few months and spent all their money,” says West. “It’s like Thailand in that respect – you feel sorry for them.”

“You have to be self-motivated to succeed here,” says Pearson. “Berlin life isn’t hard enough for some people – it doesn’t provide enough incentive. The panic of bills and deadlines can be motivating.”

But some of the most successful new Berliners have found a solution: the mega-commute. “I use Berlin as my quiet studio space,” says Causer, who works in both London and Berlin. “I feel protected from things there. Being removed like that helps me to see things more clearly. I need London to give me a kick, but I wouldn’t want to live there permanently.”

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