First, America's real estate bubble popped. Then came Ireland's, then Spain's. All that escaping air may have been flowing into Germany, where economists are now warning that the first signs of a property bubble may be starting to appear.
German property prices have been zooming upward in recent years, as international investors pull their money out of struggling countries such as Greece and Spain and move it into Europe's biggest economy in a desperate search for stability. If further price rises are followed by a crash, Germany, which has footed much of the bill for its neighbors' bailouts, may enter a rough patch of its own, analysts say.
Bubbles are notoriously difficult to diagnose as they happen, and not all economists agree that Germany is entering one. But danger signs are there, many say. With rock-bottom interest rates, low unemployment and new money flowing in from foreign investors, many analysts say, Germany may experience an unpleasant pop in just a few years if prices keep rising.
The consequences could be wide-reaching, since significant portions of the 17-nation euro zone's crisis response plans depend on Germany's continued good economic health. If the country's finances were to slip or if German voters felt themselves more vulnerable, Germany's economic ability and political will to foot the cost of the bailouts may fade, analysts say.
"If we learn from the U.S. experience, we should be cautious, even if we up to now aren't in a bubble," said Kai Carstensen, an economist at the Ifo Institute in Munich. "When I talk to politicians, they always say, well, it's different. That's what you always hear; this time is different."
"We are shielded against a bubble better than the U.S. or Ireland," Carstensen added. "But it's not impossible."
Germany's central bank has declared itself on guard against prices that rose about 5.5 percent last year nationwide.
That rate is "something that we will need to watch," said German Bundesbank President Jens Weidmann in March.
Prices since then have only gone up. In fashionable Berlin, some analysts say prices have spiked 20 percent in the last year, though others say the rises have been more modest. Brokers say that much of the interest has come from foreign buyers seeking to protect their money from Europe's turmoil by investing it inside what have been the euro zone's safest borders.
Germans themselves are also more interested than ever in buying property. Only 43.2 percent of Germans own their own homes, according to government statistics. But unemployment rates are the lowest in decades, and low interest rates are making it cheap to take out home loans and unattractive to park cash in savings accounts.
Germany's central bank reported in June that construction permits for new housing were up 9 percent between the period from September 2011 to March 2012 and the same span a year earlier. Much of the growth has been in apartment buildings, an indicator of investment activity, not just in the purchase of homes by buyers who intend to live in them, the bank said.
The distinction is important because it can determine how the economy would be affected by a sudden drop in prices. Homeowners who make a large down payment — in Germany, 20 percent or more of the purchase price is common — and live in the home they purchased can often ride out a downturn. Profit-driven purchases for investment, financed by heavy borrowing, may have tougher consequences for the overall economy should a bubble burst, economists say. But they also say they have not seen indications of major borrowing-driven purchases in Germany.
Much of the investment is being paid for in cash, and the rises are coming at the end of a long period of stagnation, economists say. Prices are about 20 percent higher than they were at Germany's reunification in 1990, they say, not a cause for alarm. And the market's upward direction is also powering growth in Germany's economy more broadly. It is slated to grow about 1 percent this year.
"The price increases in the last years are very well supported by fundamental data," said Thorsten Lange, a real estate analyst at DZ Bank, who said it was unlikely that Germany was heading into a bubble. "You need a longer term of stronger price growth" for that to happen, he said.
Nor does the froth appear to be building on itself.
"If you define a bubble as, 'the price is only high because investors believe that prices are going to be higher in the next year,' then you have no bubble in Germany," said Ulrich Kater, the chief economist at DekaBank.
But in cities such as Berlin — long known as an unusually inexpensive European capital — anxiety about future housing costs is palpable among long-time residents. Protests against gentrification and price hikes seem to happen every other weekend.
Among real estate agents, a robust market brings only good cheer.
"We've noticed a lot more interest from people abroad buying apartments in Berlin," said Anne Riney, the head of the Berlin-Mitte office of Engel & Voelkers, a real estate firm. The Mitte district of Berlin has seen some of the fastest price hikes.
"People have lost trust in banks, they're afraid of inflation, they've never had this kind of economic crisis before, so they don't know what to expect," she said. "They're putting their hard-earned savings into something solid."
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Petra Krischok contributed to this report.