The price of residential property in Germany has risen by 5.5% over the last year. This may be indicative of a bubble developing or may be a reaction to inflation in the eurozone. If it is a reflection of inflation, it will induce acute anxiety in German politicians and the general public with consequences for all. This will be bad news for the Irish economy and mortgage holders in particular. It may prompt the ECB to raise interest rates, which will have a detrimental effect on Irish borrowers, who I suspect vastly outnumber the savers out there.
Could be that German prices have barley risen since 1990 and are due a lift as there economy has been growing quite well the last few years.
The speculation about the euro collapsing also led too a lot of money being put into German assets such as bonds and property because if the euro does split up the new German currency will rise in value against other European currency as Germany public finance are under control and they are running a considerable current account surplus with the world.
On another point that what really really annoys me, Germans pay has not risen in the last decade while Irish public service pay since then Is circa 50% higher in the same period, and that includes the pay cuts of 09/10 where the irish PS was clearly r*ped. And now we expect Germans to come along and pay for our Celtic tiger wages when they got no increases. And then we speak of german politians as interfering when they tell us enough scrounging off them and get your finance in control,
Why should Germans pay for the Croke park agreement? Rip it up and cut PS pay and social welfare to what it would have been if they had increased PS pay and social welfare inline with what Germans got in that time period. That is fair.
A few months ago a Frankfurt estate agent told me that purchase prices have been rising although rents have stayed much the same. He said that the increase in prices had nothing to do with confidence in the property market but was a reflection of people’s fear of inflation and Euro instability. I’d expect German prices to slip back if things calm down in the Euro zone and the billions the ECB has created do not result in inflation.
There are very few houses in German cities compared to Ireland, and they tend to be large, detached, in good neighbourhoods. Germany doesn’t in my experience have equivalent areas to the UK and Ireland with large areas given over to three and four bed semi D’s. So the German houses will compare to a subset of Irish houses e.g. in SCD. The average Irish home is perhaps closer in equivalence to a nice German apartment in terms of floor area, location etc.
I don’t think Irish people in general are tuned in to the size of places as much as they should be. Apartments are still primarily thought of in terms of number of bedrooms, not number of square feet. Rentals don’t even list the size in Ireland which is certainly not the case in other countries where I have lived.
I’d happily live in an apartment if it was 150m2 and had a storage room in the basement.