Not a day goes by without seeing some news article regarding the ongoing debt crisis plaguing many European countries. Recent headlines even state that Germany, seen as the major country keeping the eurozone afloat, is showing signs of an economic slowdown, so it may come as a surprise to some that the latest housing numbers show that the German housing market is doing just fine. In fact, the recent numbers show that there is a housing boom with construction up 6.2 percent in the first nine months of 2012, making for four years of consecutive growth.
ZDB, a construction lobbying group in Germany, credits the growth to the low interest rates and a fairly steady employment rate. The current conditions have contributed to a rise in both residential and commercial construction which were up 2.6 percent and 14 percent respectively. Looking forward into next year, ZDB sees continued growth at a rate between 4 and 6 percent.
With economic slowdown and a booming housing market, you may question whether Germany is setting itself up to duplicate the mistakes the United States made leading up to the financial collapse in 2008. Germany’s central bank, the Bundesbank, fears that that may very well be in the country’s future, but ZDB has their doubts. Unlike what happened in the US, there don’t appear to be signs of uncontrolled credit going along with the rising housing prices.
Source: Deutsche Welle
Photo by USACE Europe District