Between 2009 and 2012, prices in large cities rose by almost 25%. And, in 2013, they increased by another 8.9%. Calculations by the Bundesbank already point to overvaluations in urban areas. Nevertheless, when looking at the German market as a whole, the situation seems less dramatic.
In 2013, prices rose by an average of 4.5% – a figure that does not give too much cause for concern. Overall, prices in Germany have not yet moved away from fundamentals. For me, warning bells would start ringing if there was a rapid increase in housing prices accompanied by a significant rise in lending.