In its monthly report, the Bundesbank warned that housing prices in urban areas of Germany “are difficult to justify based on fundamental factors.” The German central bank explained that values are almost 20 percent too high for homes in some areas of the country. Specifically, areas such as Berlin, Hamburg, Munich and Frankfurt have seen prices rise for apartments by almost 25 percent in the last three years alone. However, it’s not Germans buying these more expensive units. It is foreign investors who are looking for value after the U.S. and European real estate bubbles burst. Finally, these assets are in even more demand as the return on other financial assets has fallen. So, if you want a Deutschland getaway, you may want to get one fast.
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