Germany’s Federal Statistics Office (Destatis) has announced the last quarter of 2021 and 2021 data on residential real estate prices.
Accordingly, housing prices in Germany increased by 12.2 percent in the October-December period of last year compared to the same period of 2020.
In the statement of Destatis, stating that the said increase came after the increase of 10.8 percent in the second quarter and 12 percent in the third quarter of last year, “Since the beginning of the records in 2000, the prices of residential real estate have been the strongest in the three-month periods of the previous year. There was a price increase.” it was said.
Housing prices in the country increased by 11 percent on average throughout 2021. Housing prices had increased by 7.8 percent on average in 2020.
It was remarkable that there were higher than average increases in Germany’s big cities Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf.
On the other hand, the prices of detached and semi-detached houses increased by 12.8 percent in 2021 compared to 2020.
While the European Central Bank’s (ECB) extremely loose monetary policy, which provides historically cheap housing loans, pushes housing prices even higher, experts warn against overvaluing real estate in Germany.
While housing prices and rents are increasing rapidly in Germany due to the new type of coronavirus (Kovid-19) epidemic, the epidemic brings along concerns about social equality and financial stability. In many German cities, from Berlin to Cologne, families find it “impossible” to own a house because of the high prices.
There is concern that more people trapped in high rent in Germany will lead to political polarization and greater inequality.
Analysts said that the low housing supply, the influx of immigrants, the lowest interest rates in history, the savings accumulated due to the restrictions during the epidemic and the increase in the desire to be in more space with working from home accelerated the upward trend in housing prices.
German Landesbank Baden-Württemberg (LBBW) Economist Martin Güth said: “The renewed increase in price increases shows that the Bundesbank and ECB are right to be concerned about the emergence of a bubble in the German real estate market. makes it clear.” said.
Güth, however, stated that the cards are currently being reshuffled in the real estate market due to the rapid increase in inflation, the significant rise in interest rates and the war in Ukraine, and pointed out that refugees from Ukraine will create new housing demand.
The Bundesbank has long warned of the growing dangers in the German real estate market. In a report by the Bundesbank, published in February, it was stated that “overvaluations in residential real estate have increased,” and emphasized that according to the latest estimates, real estate prices in cities in 2021 are between 15 percent and 40 percent above the price indicated by socio-demographic and economic bases.
Meanwhile, home overvaluation had reached 30 percent in 2020.