Not overheated: german property market shows improvement

Photo credit: Mika Meskanen

The report shows that the country's real estate continues to improve, with house prices rising 3 per cent year-on-year. That rate of growth is slightly slower than the 4.5 per cent recorded in 2012.

Despite the ongoing rise property values, though, Germany is not considered oveheated by Fitch, thanks to the country's positive economic conditions, reports OPP Connect, as well as the long-term stagnation of prices before 2009. Low rates are the main driving factor in demand for German property, with buyer interest now stronger than construction activity in the market.

These conditions, combined with the search for a safe haven, will push house prices up moderately in the mderium term. Incomes are likely to increase too, though, keeping affordability at a stable level for 2014.