German property is booming
Germany's policy makers fear the country's housing market could be in a bubble.
German policymakers, ever wary of rising prices, have begun to fret that their housing market could be developing a bubble.
In 2010 and 2011, house prices rose by 2.5% and 5.5% respectively. In Berlin and Munich, apartment prices increased by around 10% last year. Sales have soared: "German apartments are getting ripped out of people's hands", says Andre Adami of BulwienGesa. Rents are buoyant, having climbed by 8.3% in Berlin over the past 12 months.
So far "house-price increases look sensible", says Rene Schultes in The Wall Street Journal. "There is an element of catch-up." House prices fell in inflation-adjusted terms between 1995 and 2009. The fundamentals support higher prices, with demand climbing as more people choose to live alone and supply struggling to catch up with this trend.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
A hallmark of a housing bubble is crazy lending, and there's no sign of that yet. Residential mortgage loans are up by just 1% a year in the past decade. "For now, rising prices in Germany are a healthy... sign."
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Regulator moves to protect access to cash amid branch closures and disappearing ATMs
News The Financial Conduct Authority has told banks to start assessing if local communities have adequate cash access from mid-September
By Marc Shoffman Published
-
VAT hike on private school fees could come earlier than previously expected
The government could start charging VAT on private school fees as soon as January 2025, according to the latest reports. What does it mean for parents?
By Katie Williams Published