Press Release Institute of German Economy in Cologne
No. 30/2012 August 2012
German Property market
No bubble in sight Real Estate in Germany is becoming more expensive. Since 2010, the price increases is up to 4.5 percent, what is well above the inflation rate. Especially in urban areas, the values of the flats and houses increase steadily, shows an examination of the five largest cities by the Institute of Economic Research (IW). In Hamburg prices for condominiums raised by 31% in period from 2003-2011, in Berlin as much as per 39%. But concerns that this may lead to price bubble form similar to the USA, Ireland or Spain are unjustified. Thus, despite extremely low interest rates, neither expansionary lending nor a very high rate of purchase or resale is observed. In addition, the rents kept pace with the development of prices. Hence, expensive real estate appears to be rather an expression of high demand and attractiveness of the German market. Ralph Henger, Kirill Pomogajko, Michael Voigtländer: Is there a speculative bubble at the German housing market, in: IW-Trends 3/2012 Contact the IW: Dr. Ralph Henger Phone: 0221 4981-744 Prof. Dr. Michael Voigtländer Phone: 0221 4981-741 Telephone press conference on 2 August in Berlin: 0175 9163578 (Dr. Henger) 0172 3881070 (Prof. Dr. Voigtländer)
This press release was originally published in German. The Propfund marketing team have translated the article and don’t accept any responsibilty for possible errors and are not liable at time of publishing. The original in German is also available to download from the website http://www.iwkoeln.de/de
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