Germany house prices in international and historical perspective.
With the rise of the German house prices concerns have increased that a housing boom has begun, which could end up with noticeable negative impact on the German economy. Our analysis of house price cycles in OECD countries shows that the current price increase in Germany, compared with past climbs, are moderate. Compared with other OECD countries, Germany shows even well below-average prices. We expect that the increase in real estate prices will continue in Germany, but the formation of a bubble is unlikely and the price increases are the normalization of the total housing market.
The development in different areas are obviously different. Munich and Hamburg are closer to a possible "bubble" than e.g. Berlin which is still highly undervalued compared to other European capitals like Warsaw and Budapest, not to mention Paris or London.
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