Breakingviews: Berlin’s housing boom has lessons for London
Tuesday, March 25, 2014 - 03:00
Mar. 25 - The Bundesbank says property prices have risen 25 percent above fair value. But Breakingviews argues Berlin’s housing boom is much less likely to last than London’s.
▲ Hide Transcript
▶ View Transcript
London have. Plenty to learn from and when it comes to property prices that is a -- that -- -- brushed all that Iran is bringing newsroom this morning that Edward had us is gonna talk to us about it they write US industries haven't I'm. It's got a lot to do with the way central banks are playing this right. Yeah central banks are there but it I think I would start not with the banks and with the technicalities with the attitude. -- in Germany in general. The idea that house prices or housing prices should rise is considered a bad thing. The reason for that. Is basically because -- a lot of -- in Germany -- for them how rising prices is rising prices not capital gains -- 42%. -- -- yeah I was 43% through pretty happy price increases of about 25% of the population -- winner homeowners in the big cities it's more like 706070%. Or renters. So the majority and including not like in this country where it renters tend to be young or war. It tends to be very solid middle class people and they have a very strong constituency. The culture in Germany still remains the culture of solid steady prices renting. And soon we're going on Germany in Berlin right now it's considered a bad thing yeah and a and a -- Oda says against against property speculation -- yes yes. Sit in the UK's -- financing techniques to help you get on with there for -- the housing ladder here. You know. Putting down almost no money and very low mortgage rates you know trying to make it easy easy as possible to -- whereas in Germany and view you need 3040%. Down payment for your first house. It's considered normal to save up for five or ten years before you buy and no one really expects to make huge capital again conservative the sensible. Russian resign July to resolve say that. Option but the other thing that's that's in the piece which is important is that -- this we're -- the Berlin where prices have risen 25%. Berlin has an advantage which is that it's a lot of green space which London doesn't have. But what Berlin has that London also doesn't have as a -- planners are in favor of building houses its its they -- giant construction. Project and it's just. I saw there was this that come back to the central bucks America to choose -- on dvd to Bank of England. Is doing -- best -- down property risk. The Bundesbank. Is going to be ready to -- The Bundesbank has said this to specifically they said profit -- prices are overvalued in Germany and they made a quick clear that if the voluntary actions of banks don't don't change this that they'll take take action in terms of tightening lending standards there. Where is it Mark Carney is trying to pretend that there's nothing going on nothing to worry about all right we shall see added many thanks but palace and -- of breaking news. At your watch our US abbreviation twelve birdies and from confetti GMT. -- on the inside a platform. -- -- --
Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code