It’s a fact, though, that Berlin has no big old-guard collectors. Dealers thrive on out-of-town buyers, both German and foreign, and on the tourist trade. But if Art Forum Berlin, the city’s annual contemporary art fair, is any indication, a new generation of resident collectors is on the rise. They’re in their 30s and 40s. They tend to work in design, advertising or information technology. And they’ve helped Art Forum, which takes place from October 31 to November 3 this year, grow steadily for 12 years; last fall it drew 44,000 visitors and booked sales of €77 million ($111 million). Sabrina van der Ley, its founding director, confidently predicts that “in five years, Berlin will have bypassed London as a primary art market, a producing market.” Others are not so sure. Robert Ketterer, managing director of the Munich-based auction house Ketterer Kunst, has seen its showroom on Berlin’s Fasanenstrasse flourish just two years after opening, with every auction bringing 60 to 80 new buyers. But he has some doubts about the long-term promise of the contemporary art craze; he believes it runs the risk of flooding its own market. “When a dealer sells a big contemporary picture, it leaves a gap on the gallery wall,” he explains. “So what does he do? He phones the artist and says, ‘Paint another one—and another.’ That doesn’t happen with Expressionists, which are in finite supply.”

The newest gallery row is a world away from Charlottenburg. It extends a couple of kilometers northward along the Brunnenstrasse, in east Berlin. Dozens of small galleries, some of them still being outfitted and roller painted, stand cheek by jowl with old tenements, decrepit former squatter dwellings and a tall, early Art Nouveau building. The last now houses the Berlin Senate’s cultural section, which six years ago had the good sense to transfer its offices to where the action is. That move in turn drew more galleries. A storefront here still rents for just €500 ($740), and an apartment for €300 ($450). The showrooms, most of which feature emerging artists, provide an eyeful of the characteristics that much of Berlin’s art—wildly varied as it is—has in common: It’s bigger, because low rents mean more loft space. It’s younger, because arriving artists tend to be young. And, until recently at least, it was rougher, because installation artists, especially, worked with the old wood, bricks and I beams discarded in Berlin’s breakneck reconstruction.

Among the recent arrivals to the Brunnenstrasse is Aaron Moulton, a 30-year-old American who launched Feinkost Gallery last spring. He tends to show surreal, socially provocative works that denounce, say, urban blight or art for the market’s sake. “Why Berlin? Berlin simply has more scope for collaboration with the artists themselves,” says Moulton. “It’s still La Bohème. You see artists in a café, and you’re free to talk with them. Berlin is still very open—it’s still up for grabs.”

The city’s august old-line cultural institutions have little to fear from the vibrant new scene sprouting up around them. That’s because Berlin’s 35 museums, seven symphony orchestras, three operas and, to a lesser extent, its 30-odd theaters are all thriving. “There’s room for everybody,” says Doreet LeVitte Harten, a prominent independent curator in Berlin. “If anything, the museums are very happy because the young art crowd gives a dynamism to the city.”

That dynamism helps attract eight million tourists a year— an invaluable windfall for a city that has never replaced the heavy industry it lost in World War II or the advanced light industry that exited during the years of Cold War isolation. Without it, after all, what would Berlin be, but a morose, indebted trough of government offices and high unemployment? Instead, staid old culture and sassy new culture share the exhilaration of a voyage of discovery, as an unfinished Berlin searches for its future urban identity. As Mayor Klaus Wowereit is fond of saying, “Berlin may be poor, but it’s sexy.”