According to German central bank estimates, apartments in large German cities are overvalued by up to 20 per cent in some cases reports Handelsblattl.

The price per square metre can be as much as €4,800 in Munich, points out the daily, while purchase prices have increased by 35 per cent in Berlin and Hamburg since 2007, and by 24 per cent in Cologne. Although it is warning investors, the central bank is not predicting a property bubble comparable to the ones which occurred in the United States, notes Handelsblatt, because —

… unlike the United States or Spain, in Germany home buyers borrow less when financing house and apartment purchases. Furthermore, the banks apply stricter criteria when granting loans.