German housing market getting 'too expensive'

Berlin

GERMANY'S housing market is becoming prohibitively expensive and it's time to prepare for a downturn, according to the head of the country's second-largest landlord.

While some investors are willing to outbid one another in a bet that home values will continue to rise, rents don't justify the prices being paid, Deutsche Wohnen AG chief executive officer Michael Zahn, 52, said in an interview. Instead, the Berlin-based company is scaling back acquisitions and refinancing debt.

"There's a limit to how much I'm willing to pay," said Mr Zahn, who has almost tripled the company's portfolio to 150,000 apartments in three years. "Opportunities to refinance right now are much more attractive than acquiring." Germany's publicly held residential sector, now dominated by Deutsche Wohnen and its main competitor Deutsche Annington Immobilien SE, has grown tenfold since 2012 as new companies raised money in stock offerings, bought rivals and accumulated apartments. Deals have been financed with record levels of debt and share sales as companies take advantage of low interest rates and strong demand for real estate from international…