From 1970 to 2020, the Price of Housing in Germany Increased by 300%; Adjusted For Inflation
While Germany was once known for its stable and affordable housing market, recent decades have seen a dramatic rise in home prices that is now pricing many residents out of the market, especially in major cities like Berlin and Munich.
Between 1970 and 2020, the price index for owner-occupied housing in Germany increased by 1,000%, from a base of 100 in 1970 to 1,000 in 2020. Even after adjusting for inflation, real house prices still rose around 300% over this 50-year period.
The sharpest increases occurred in the 2010s, with nominal house prices jumping 50% from 2010 to 2020. This surge has continued in recent years, with the house price index up 11% in 2021 and another 8% in 2022.
Several factors contributed to Germany’s historically affordable housing:
- A “right-to-build” clause in the constitution that made it easier for developers to construct new housing
- Rent controls and strong tenant protections that prevented rents from rising sharply
- Conservative mortgage lending practices with low loan-to-value ratios
