Germans Warn on High Residential Property Prices

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As property prices in Germany’s big cities continue to climb, the country’s central bank last month added its voice to a chorus of concern about the prospect of a bubble. While it avoided using that word, the Bundesbank’s February report noted that housing in German towns and cities — Europe’s biggest residential market by value — was overpriced by 15-30 per cent, the Financial Times reported. The German property research group Empirica suggested last month that prices could fall by between a third and a quarter in Berlin, Munich and Stuttgart over the next five years. An obvious cause of recent price inflation, say experts, is a chronic imbalance between supply and demand. Between 2011 and 2015, fewer than half of the apartments required by Germany’s main cities were built, according to a report from the Cologne Institute for Economic Research in June 2017. The scarcity is particularly acute in the major cities. “The biggest issue for us . . . is to acquire properties for sale,” says Kai Enders, a board member of the estate agent Engel & Völkers in Hamburg. Read more. (Subscription required.)