Germany’s Growing Housing Market May Be Growing Too Fast

Germany is one of the most conservative countries when it comes to homebuying– less than half of the citizens in Germany own property. This is thanks to tough lending rules and expectations of high down payments, which means it is difficult for Germans to buy homes unless they are financially sound.

The European debt crisis, however, is changing all of that. With low interest rates, buyers are looking to grab property while they can, often expecting to pay for the entire cost using huge loans. International buyers, lured by Germany’s political stability over countries like Italy and Greece, are also buying property at high rates. This has analysts fearing a collapse similar to the US housing crisis of 2008.

The growing demand for property has meant that prices have skyrocketed. Buyers taking out huge loans are expected to make huge payments in return. With the country paying for the bulk of the bailout payments, experts fear that Germany’s economy can really become unstable. Despite being a fiscally conservative country, fear over collapse is growing. As a precaution, banks are already taking preventative measures to insure long-term prosperity.

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