Firstly, the shortage of housing accommodation owing to the considerable inflow of immigrants in the late-1980s and early-1990s and the ensuing rise in rents was a strong incentive for capital spending in the housing sector.
Secondly, this trend was further reinforced by the sustained fall in mortgage costs and the many different public sector promotional measures which favoured external financing and, moreover, directed a considerable amount of private capital into the new Länder.