What size of home would you be willing to raise your children in? The average 3 br is 1000 sq. ft. in Berlin.
US norms are for much larger homes.
As someone who lives in a 700 sq ft 1bd apartment, I guess maybe you could pack in another two bedrooms in with 300 more sq ft (my bedroom is ~ 120-130 sqft w ~ 25 sqft of closet space). You wouldn't have a whole lot of elbow room. Still makes more sense than the 2500+ sqft monstrosities we regularly build in the states.
A typical 3 bedroom flat/house in the UK has similar area. IMHO in terms of house sizes the US (with large houses) is an outlier, not Berlin.
I grew up (as the oldest of 5 siblings) in a split-level home about 1200 sqft. It was fine, we just shared bedrooms. Based only on anecdotal evidence, we grew up closer than other families I knew where each kid has their own bed and bathroom.
Square footage matters less than configuration.