Germans flock to property as interest rates fall and rents rise

Berlin

UNLIKE his parents who rented their whole life, Berlin resident Sebastian lives in his own apartment and is considering buying a second property in the German capital as an investment to top up his pension one day.

For decades a nation largely of tenants and prudent savers, growing numbers of Germans are buying property, not just to own their homes but also in search of investment returns they can no longer earn on their bank savings.

This shift to a more US or British approach to property is being encouraged by the European Central Bank's cheap money policies and rising rents, especially in German cities.

A growing urban population and unexpectedly high immigration are pushing up a housing market where construction rates had been low for years. "I've a private pension scheme, but despite diligent saving, it hardly yields anything due to the ultra-low interest rates,"said Mr Sebastian, a 38-year old management consultant, who asked not to be named in …