Property in Germany is proving popular with
Germans that seek better returns than those available when saving with German
Banks. The attraction of an investment into the German property market has
resulted in increases ion German real estate prices.
Itââ¬â¢s a fact that German property prices are
on the up and demand continues from both local and international investors. All
see Germany as a safe bet.
Andreas Dombret, from Bundesbank said
Prices for newly built homes in the largest
German conurbations had risen 9 per cent in 2011 and the increase ââ¬Åseemed to
have continued in the first half of the yearââ¬Â,
Property prices in Germany seem to be at
their highest in the cities where demands is outstripping supply. Goldman Sachs
called Germany a “high flyer” and noted a sharp increase in property
prices in the country after an era of notably quiet and stable prices.
Real estate prices in cities such as
Berlin, Hamburg and Munich have risen between 5 to 20 percent in a year,
according to property price analysis by German bank Helaba and property
consultancy, Jones Lang LaSalle, respectively.
Demand for German property is not matched
by a rise in house building: where 600,000 new apartments were built in Germany
in 1995. The abolition of tax
breaks has resulted in a small number of new builds hitting the market in fact
in 2009 saw the number of new units dropped to just 160,000.
The government is clearly worried that ever
increasing house prices could result in some sort of property bubble bursting.
It seems that Germany is far less exposed to a bubble. Mortgages in Germany rose
last year by only 1.2 per cent, below the 2001 level.
ââ¬ÅFor now the potential for a reversal on
the German property market is manageable,ââ¬Â the Bundesbank said, though if it
plans to ââ¬Åwatch intensivelyââ¬Â markets in Germanyââ¬â¢s big seven cities.
Author
Nick
Marr
