Real Estate Prices Aren't Surging For Everyone In Germany

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Photo: Oliver Kurmis via Flickr

Germany’s not in a property bubble, but some of its regions are seeing a big spike in investment, according to the Wall Street Journal.Last month, German publication Der Spiegel pointed out some worrying signs that a bubble in real estate was, in fact, forming in Germany.

New data confirms that investors are rushing back into Germany’s real-estate market, but only to segments that are seeing higher demand. So Germany’s property price spike is highly localised.

The Wall Street Journal reports that:

  • Residential property prices are up 17% in Berlin and 15% in Frankfurt since October
  • Rents in Berlin are up 8% over the past two years.
  • Vacancy rates in Hamburg are at a low 1.3%

However, the picture is not as rosy throughout Germany. Migration to wealthier cities has left an oversupply of houses in Germany’s poorer areas.

  • In Saxony-Anholt, vacancy rates are 9%
  • Prices are down more than 30% in some Eastern cities during the past decade.

So it may be a bit early to start calling this Germany property price spike a bubble.

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