Berlin property prices skyrocketed in 2017, outpacing all other major centers, according to a new report. Three other German cities also ranked in the global top 10.
Berlin property prices increased more than any other major city throughout 2017, a study from property consultancy Knight Frank reported on Wednesday.
The "Global Residential Cities Index" found average property prices in the German capital increased by 20.5 percent, 2 percentage points more than Izmir, Turkey, which ranked second.
Three other German cities ranked in the top 10. Hamburg had the seventh highest housing price increase at 14.1 percent, followed by Munich in eighth (13.8 percent) and Frankfurt in 10th (13.4 percent).
The study found that the average growth of housing prices worldwide has dropped from 7 percent overall in 2016 to 4.5 percent in 2017. Twelve cities, the study said, had a registered price growth above 20 percent in 2016, whereas Berlin was the only city to have a price growth above 20 percent in 2017.
The study attributed the large increase in Berlin to "strong population growth, a stable economy, record low unemployment and robust interest from overseas investors (are) together propelling prices higher."
A growing housing bubble?
In Berlin, where real estate was affordable for much of the past two decades, average property prices have increased by 120 percent since 2004. On top of that, Bundesbank, Germany's central bank, suggested in February that real estate prices in German cities may be overvalued by 15-30 percent and as much as 35 percent in Berlin.
Lawmakers are making efforts to ease housing costs in the city. In 2016, the ruling Social Democrats (SPD) enacted a law — called Zweckentfremdungsverbotsgesetz — that fined landlords up to €100,000 ($125,000) for illegally renting out their property for short-term stays.