02nd of April 2007

iPropertyCLUB News

Germany fails to join the EU housing boom

According to the European Housing Review 2006, Germany is the only major European country where residential property prices have not risen in the last year. In a recent report, analysts at Merrill Lynch also observed that the country has conspicuously failed tojoin in the global housing boom of the past ten years!. Factors that have contributed to this situation are low levels of home ownership (42% compared with 70% in Britain) and a previous culture of state subsidy for rental accommodation.

Liam Bailey, head of residential research at Knight Frank said: "The German property market has underperformed for a long time. It's one of the few markets where property investors can still pick up big chunks of stock very cheaply."

Despite a recent upturn, prices for a city centre apartment in Berlin are still around 60% cheaper than an equivalent flat in London. A six-room apartment in the prosperous Friedenau district still costs less than £200,000. Prices in the former communist-led East Germany are also still significantly lower than in the western half of the country.

Source: Property Investor