Germany's house prices have been rising for a long time. With the Euro debt crisis continuing, people have flocked to the country's comparatively stable economy as a safe haven for investment - and swooped on its most secure asset: property.
Indeed, since 2010, prices have seen an average annual increase of 4.5 per cent, according to the Cologne Institute for Economic Research - far above inflation rates. In Berlin, prices have climbed consistently by 31 per cent between 2003 and 2011, while Munich, Germany's most expensive real estate market, has seen prices climb by 23 per cent in the same period.
But while some fear the latest surge in values could lead to a housing crash, Cologne's institute insists the boom is bubble-free.
"Despite extremely low interest rates, there is neither an expansive money-lending tendency, nor a very high rate of purchase and re-sale," it said.
Conservative lending from banks and Germany's habit of renting property are helping to reduce the risk of a bubble. "Only if huge amounts of foreign money were to pour into the German property market would [there] be a danger," adds The Local.de.
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