Over the past 3 years a wide range of governments, regulators, banks and buyers have collectively been suffering from what might be described as Icarus Syndrome.

Laws and tax breaks were installed to encourage rampant construction of apartments, offices and hotels in dubious locations. “Soft touch” regulation was all the rage and banks were competing with each other to see who could rubber stamp the most loan and mortgage application forms in the shortest possible time. Buyers were borrowing beyond their means to purchase overpriced property developments around the world.

Too many thought they could keep on flying forever until finally, in early 2007, Icarus like, they soared too close to the sun and fell back to the ground with an almighty thud.

While all that craziness was happening, there was one country that paid no attention to the excesses of its neighbours during the boom.

Their banks didn´t get carried away with huge loan to value mortgages and their citizens generally saved more than they spent. Economic growth, rental rates and property price inflation were all stable and steady. It was and still is by far the most important economy in Europe and has been a profitable and safe haven for investors for decades.

Tags: Colin Murphy, German Commercial Property, German Property, Torcana, Torcana Blog, Torcana Germany
Posted in General Opinion, German Property |