wtt Frankfurt Championship Helmet (Frankfurt Club emblem)

Transferred from: Zeping Macro (ID: zepinghongguan); Authors: Ren Zeping, Gan Yuan

Since the marketization of housing in 1998, housing prices in China have risen almost unilaterally. The government frequently regulates the housing market, but it often only has a short-term effect, and the more it adjusts, the more it increases.

Across the world, few countries can maintain long-term stability in housing prices, but Germany is "alone". From 1977 to the present, Germany's per capita income has increased by about three times, but nominal housing prices have only increased by about 60% during the same period. After deducting the impact of prices, Germany's average income has increased in the past ten years.wtt Frankfurt Championship Helmethouse prices are falling at an annual rate of 1%. In previous financial crises, German housing prices have never fluctuated sharply. Why have German housing prices been so stable for a long time?wtt Frankfurt Championship Helmet？What is the reference significance for us?

1 German real estate market that is "isolated" in the world

German housing prices are unique in the world for their long-term stability. 1) From the perspective of absolute housing prices: Germany is low in both nominal and actual prices, and has strong stability;2) From the perspective of relative housing prices: Germany's price-to-income ratio and price-to-rent ratio are lower than those of other developed countries. At the level of countries, even Germany's house prices are rising at a slower pace than income, and the house-to-income ratio is gradually declining;3) From the perspective of housing ownership: Germany's leasing market is the largest and most mature and regulated market in Europe, and has a relatively complete legal system and supporting measures. More than half of the residents choose to rent, which in turn reduces the demand for home purchases and reduces price fluctuations.

1.1 Overall characteristics: Reasonable housing prices and low price-to-income ratio

Horizontally, among the world's major developed cities, Germany's core cities have low housing prices and price-to-income ratios. Judging from the price-to-income ratio, Munich and Berlin are at low levels not only in Europe, but also in other continents. London and Hong Kong are about three times as large; judging from the rental yield, Germany is at a medium level among developed cities around the world; Judging from the price-to-rent ratio, Germany's payback period takes about 20 years, which is equivalent to that of the United States and much smaller than that of London, Paris, Shenzhen, and Hong Kong; In terms of mortgage income ratio, Munich is 72.15 and Berlin is 51.92, which is about a quarter of that in London and half of that in Paris. In terms of house prices, the average house price in Berlin, Germany is only US$4578/square meter, far lower than that in London (US$28713/square meter) and other developed cities.

From a vertical perspective, German housing prices have maintained long-term stability.

1. The period from 1970 to 1981 was a rising period, with a cumulative increase of about 23%;2. The period from 1982 to 1996 was a declining period, with a cumulative decrease of about 30%;3. The period from 1997 to 2007 was a period of slight fluctuations, and house prices remained basically stable;4. The period from 2008 to 2015 was a rising period, with a cumulative increase of about 10%.

Unlike the low growth trend of German real estate market prices, the real estate markets of major developed countries around the world have gone through multiple cycles of rising. Especially after 1998, the global real estate market has experienced obvious collective prosperity. After the subprime mortgage crisis in 2008, global QE and zero interest rates led to a general increase in house prices.

Germany's volatility over these decades has been significantly lower than that of other countries. 1970-2015 In 2001, the nominal housing index in the UK increased by more than 50 times, while the United States, which has a relatively small increase, increased by more than 13 times. Only Germany and Japan increased by more than three times. Although Japan's numbers are similar to those of Germany, the mechanism behind them is completely different. Japan has experienced a process from crazy rise in real estate to bursting of a bubble.

1.2 Per capita income rose, but the price-to-income ratio fell

Overall, from 1970 to 2015, the nominal price index of new housing in Germany increased by 90%. After deducting the impact of inflation, its real price fell by 11.3%, and the real price-to-income ratio fell by 62%. Since the 1980s, Germany's price-to-income ratio has continued to fall. Real housing prices in Germany do not keep the same direction as real per capita GDP, breaking the positive correlation between housing prices and per capita disposable income.

Through the above analysis, we can find that the performance of the German housing market is different from that of most countries in the world. What factors determine the special performance of German housing prices? What factors determine the long-term stability of German housing prices?

2 German housing supply: A housing-oriented housing system design, sufficient total supply, and diversified market development

From a supply perspective, the main characteristics of the German housing market are the implementation of a housing-oriented housing system design, sufficient total supply, and diversified market development norms. German housing supply after World War II can be roughly divided into four stages:

The first stage (1949-1960), from shortage to improvement; the second stage (1961-1981), from improvement to balance; the third stage (1982-2005), from balance to easing; the fourth stage (2006-2015), the recovery stage of demand and prices. At the same time, Germany has formulated a strictly enforceable legal supporting system at all stages, making it the most developed and standardized leasing market in Europe.

2.1 Implement a housing-oriented housing system design and guarantee it in legal form

The German Constitution and the Housing Construction Law both clearly stipulate that ensuring residential housing is one of the federal government's primary policy goals. Housing with a construction area, layout and rent suitable for the needs of the majority of residents is the starting point for the German government to formulate real estate policies.

The German government has always regarded the real estate industry as an important component of the national social welfare system and has not overemphasized its status as a "pillar industry". The pillar industries that the government attaches great importance to are high value-added and technology-intensive industries such as automobiles, electronics, machinery manufacturing and chemical industries.

Germany's Housing Construction Law, Housing Subsidy Law, Housing Leasing Law and Private Housing Subsidy Law provide respectively for the supply of social protection housing, low-and middle-income rent subsidies, regulation of the rental market and private housing. It provides a legal framework and is known as the "four pillars" of German housing policy.

2.2 Adequate and stable housing supply

Germany's housing to suite ratio (housing units/household numbers) reached 1.21 in 1978 and has remained above 1 since then. World War II destroyed almost half of Germany's housing stock. After the end of World War II, Germany had a population of 62 million and 14.6 million families, but only 9.4 million houses were available to live in. Usually two or three families lived in one house. At present, Germany's total population is about 82 million, and its housing stock has exceeded 40 million units. On average, two people live in one suite.

The main construction peak was concentrated in the first 30 years after World War II, that is, 1949-1978, with an average of 610,000 housing units built annually. By 1978, there were an average of 1.21 housing units per household, and the long-term housing shortage problem was alleviated. The era of abundant total quantity has arrived, and subsequent housing construction is mainly caused by the miniaturization of family size and the upgrading of demand. In 1978, Germany's population peaked at 83 million. Since then, the population has continued to grow negatively, basically remaining between 80 and 82 million. But between 1978 and 2009, 11 million new housing units were added. In other words, while there was basically no population growth, the housing stock increased by 35%.

Overall, Germany's housing supply has shown obvious phased changes.

1. 1949-1954: in a stage of rapid expansion;2. 1955-1975: reached its peak in 1973, which was at a golden peak;3. 1976-1988: in a declining stage;4. 1989-1995, due to the reunification of Germany and Germany, there was a small housing boom;5. After 1996, the annual number of completed units continued to decline and was in a shrinking stage.

2.3 Regulate the developed rental market

The German government vigorously promotes the construction of cheap housing while supporting the construction of welfare public housing. The law stipulates that the government has the responsibility to provide public housing for families who cannot find a house due to low economic income, too many children, or ethnic or religious reasons. In response to the housing shortage problem, the government stipulates that during the loan period, houses can only be rented to families with specific income. The rent is charged at the beginning according to regulations, and then at the minimum rent. After the loan is returned, the restriction is automatically lifted.

Moreover, from 1951 to 1956, Germany actually built 3.1 million residential units, of which 1.8 million were public housing. Even though the housing problem was basically solved by the 1980s, the government continued to build high-quality welfare housing. Germany, like Switzerland and Sweden, encourages rental housing to compete with for-profit rental housing, in sharp contrast to other countries where public rental housing is suppressed to prevent competition from for-profit rental housing.

Protect the tenant's rental market. Germany has the largest rental market in Europe, with 90% of households renting freely in the market and protected by the Housing Tenancy Law; the other 10% renting social housing or low-rent housing and regulated by policy-based housing laws.

Germany has introduced the Rent Act and the Economic Crimes Act to protect the interests of tenants and curb speculative demand for investment. The Rent Law stipulates that the rent increase cannot exceed 20% of the reasonable rent, otherwise the landlord will constitute an illegal act and the tenant can sue the court; if it exceeds 50%, it will constitute a crime and the landlord will even be sentenced. The definition criteria for reasonable rent are very strict. The local housing management department communicates and consults with tenant associations and intermediary organizations to regularly provide reasonable rental price levels for houses of different types and different geographical locations. This is an important basis for the court to determine whether the rent is reasonable.

The housing ownership rate is low and the rental rate is high. Germany has a low home ownership rate. Apartment prices in Berlin, the capital of Germany, are lower than those in London, the capital of the United Kingdom, and Paris, the capital of France, about one-sixth and one-quarter of those.

It may be because Berlin's economic vitality is slightly weaker, but even housing prices in Munich and Frankfurt are not very high compared to other European countries.

Germany's home ownership rate has remained at an average of more than 40%, and more than half of households solve their housing problems through renting. The average homeownership rate in the EU is about 63%, 19 percentage points higher than in Germany. Some countries in the European Union have very high home ownership rates, such as Spain at 85%, Greece at 80%, Italy at 75%, and Portugal at 65.2%. These countries with high homeownership rates are also among the countries that suffered heavy losses during the 2008 financial crisis.

Possible reasons why Germany's homeownership rate is much lower than other countries are:

1. Ordinary residents tend to rent and buy houses. 2. The return on private housing investment is relatively considerable, making the supply relatively abundant. 3. Private tax incentives on rental housing have further stimulated housing supply. 4. Germany's residential finance policies and services restrict residents 'enthusiasm for purchasing houses. Overall, Germany's rental market is a market with balanced supply and demand. Tenants can afford rent, which is relatively cost-effective to buy a house; lessors can also get normal returns.

Germany's protection for tenants is mainly reflected in the following laws and policies:

First, the Housing Rental Law. The law mainly stipulates the formulation and performance of rental contracts, rent levels and increases, and strictly regulates the termination procedures.

Second, the rent control system. When a family house is rented out, the rent can be freely negotiated, but then the rent must be controlled. For a long time, the government has stipulated that landlords must obtain the consent of tenants if they want to increase rents. If they do not agree, they can sue and cannot forcibly increase rents.

Third, the rent subsidy policy. The government provides rent subsidies to residents based on family size, income, and rent to ensure that each family has sufficient ability to pay for rent. 86% of Germans can enjoy different amounts of rental subsidies.

The stabilizer of German house prices-the unique housing cooperative financial system. Germany's housing cooperatives own 2.1 million houses and provide housing for approximately 5 million Germans, accounting for 9% of rental housing. Matching it is its Housing Mutual Savings and Credit Cooperative. The main purpose of this cooperative is to solve the housing problems of its members. Members of the club need to save first and then borrow. Only when the savings account for 40%-50% of the loan amount can they lend. The government issues interest-free housing loans to cooperatives. The amount usually accounts for 60%-70% of the housing costs, sometimes as high as 90%, and the term is generally about 20 years.

2.4 Reasonable and stable return on housing investment

Germany's housing market has a relatively stable return on investment, stable between 4% and 5% in the long run, which is attractive enough for investors seeking long-term stable investment returns. Compared with other investment instruments, housing investment return has certain comparative advantages. For example, Germany's one-year deposit rate has continued to fall to less than 1% after 2008, and the 10-year government bond yield has dropped from the 2%-3% level before 2010 to the current zero level.

Germany's housing investment return is dominated by rental income, which is basically stable at 4.5%. The rental return rate is 4%, and the house price appreciation is 0.5%. The rent in Germany is about 7.5 euros/square meter, and 80 square meters cost 600 euros/month.

2.5 Strictly curb speculative demand and developers 'huge profits

Germany has successively introduced a number of policies to severely curb speculative demand for housing investment and developers 'profiteering behavior. In housing transactions, the taxes and fees to be paid mainly include: transfer fee 3%, evaluation fee 5%, and capital gains tax 25%, which is about 10% overall. If the house has been held for more than 10 years, no capital gains tax is required; if it is sold for less than 10 years, the taxable capital gain that needs to be paid is "the sale price of the house-the cost of acquiring the house-the price of the deductible repair cost", and Taxation is strictly carried out in accordance with the cumulative personal income tax rate. German law also strictly stipulates the pricing behavior of real estate developers. According to the Economic Crimes Act, if the price set by the developer exceeds 20% of the reasonable price, the buyer can sue the court. If it exceeds 50%, it will be classified as "making huge profits" and the developer will face high fines and severe penalties of up to three years in prison.

2.6 German housing policy that supports supply

After World War II, Germany decided to carry out large-scale housing construction, and its support for housing policies mainly consisted of three stages.

The first stage is to support new residential buildings and increase housing supply. For example, 30-35 years of non-interest-free housing construction loans are provided to promote housing construction, and tax incentives are provided for private housing construction.

The second stage is to support residents and increase residents 'purchasing power. In the 1960s, rents increased due to the liberalization of leasing rights. At this time, policies mainly restricted and regulated rents. After the 1990s, with the trend of family miniaturization, subsidies began to be provided to private houses. 1996-2005 In 2001, the subsidy for self-occupied housing reached 11 billion euros, making it one of the largest expenditure subsidies in Germany.

The third stage is to solve the housing problem with existing houses. For renovating old houses, the target group is those who cannot afford to buy a house in the market and need support. The development trend has shifted from housing policy to housing market policy. Make individuals the main body of the housing market, increase the freedom of lease contracts, and provide social welfare housing for people who do not have the ability to purchase.

3 German housing demand: total slowdown, regional differentiation

From the perspective of housing demand, housing mainly solves residents 'housing problems. Demographic factors are the core factors that determine housing demand. Population size and growth, family structure evolution, living environment changes, urbanization process and urban system, economic growth and residents' purchasing power are all important variables affecting housing demand.

3.1 Population growth and immigration slow

The driving force for urban building growth comes from the increase in the population within or around cities. According to the life consumption cycle theory, the choice of self-occupied housing mainly comes from two age groups. One is the demand for housing a house from 25-30 years old to get married, and the other is the demand for housing a house from 40-50 years old to improve the living environment. On average, first home purchases start at the age of 26 and peak at the age of 30; at the age of 33-46, the peak of second home purchases begins as the children grow up; at around the age of 50, families begin to peak their third home purchases in the resort.

The natural population growth trend of Germany is slightly downward. The peak of Germany's baby boom that originated in World War II occurred in 1968, when the total fertility rate reached 5.6, then rapidly fell to 1.4 in 1973, and remained at this level for a long time. Due to the rapid decline in the birth rate, it was already lower than the mortality rate in 1972. Despite Germany's introduction of a policy to encourage childbirth, the number of deaths in Germany has been higher than that of newborns in recent years. The natural population growth rate is always below 0, and the degree of aging is deepening day by day.

The pace of immigration is slowing down, and it is impossible to rely on immigration to solve the gap in natural domestic population growth. Some developed countries in Europe are the preferred targets for immigrants. The main driving force for Germany's population growth from 1988 to 2000 was immigration and the high birth rate of the immigrant population. Especially from 1988 to 1996, due to the unification of Germany and Germany, the cumulative number of immigrants was 1.92 million. Later, the number of immigrants in the country continued to decline, but the number of immigrants out slowly increased. The immigrant population is mainly distributed in large cities in Germany, with the immigrant population generally accounting for more than 20%, such as 25% in Frankfurt, 23% in Munich, and 31% in Offenbach.

Overall, Germany is affected by the continued negative growth of the natural population growth rate and the slowdown in immigration. The expansion of population size has been greatly limited, and the population has remained stable at around 80 million for a long time.

3.2 Aging population structure and miniaturization of families

From a structural perspective, Germany's aging process is accelerating. Due to Germany's extremely low fertility rate and low mortality rate, the degree of aging ranks first in the European Union. In 1960, Germany's aging level (the proportion of the population aged 65 and above) was 11.53%, and in 2000 it was 16.31%, an increase of nearly 5 percentage points in 40 years; in 2010, this ratio was 20.38%, an increase of 4 percentage points in 10 years, and the rate of aging has increased significantly.

Aging has made Germany's regionally oriented housing demand less affected by employment and more influenced by relationships and preferences. 1) The demand for housing suitable for the elderly population has greatly increased;2) The number of single families has increased sharply;3) The increase in the population over 60 years old has also had an impact on the demand for housing forms.

The trend of family miniaturization is significant, and the number of families is expanding at a significant rate. From 1960 to 2010, in 50 years, Germany's population increased by 11.76%, the number of households increased by 107.09%, the average household size decreased from 3.76 to 2.03, and the average household size decreased by 1.73. The main reasons for the miniaturization of family sizes are: 1) The number of young single families has increased rapidly due to the extension of the years of education and marriage of the next generation of baby boomers after World War II;

2) The number of divorced families has increased, resulting in one family becoming two families;3) The average life expectancy has increased, the mortality rate has declined, and the elderly population has increased.

Household miniaturization affects people's purchase and rental choices.

1. Although the number of households has increased, no effective housing demand has been formed. Because there is no living burden and no need to consider children's education, 72.3% of single families will choose to rent. 2. Most people consider buying a house after the age of 30, and the elderly population has the highest homeownership rate. The homeownership rate for households under the age of 30 is less than 10%. 3. There is a large income gap among German residents. Low-and middle-income families need to apply for housing subsidies, and the housing ownership rate is low.

3.3 Population flows with employment, and cities are scattered and balanced

Population moves with employment, and housing prices move with population. Germany's population mobility shows two trends.

First, the east flows to the west. Germany's population development is significantly regionalized, with the population of western cities growing and the population of eastern cities shrinking; the population of large cities growing at a low rate, while the population of small and medium-sized cities shrinking; the population of service industry cities growing, and the population of old industrial cities shrinking. Affected by globalization, some traditional factories have been relocated to lower-cost countries, causing traditional old industrial cities such as the Ruhr area to face the process of de-industrialization, which has greater pressure on population outflow; some immigrant groups have also habitually concentrated in large cities.

Second, small towns flow into large towns. Germany's urbanization has reached a very high level, but unlike the characteristics of the middle and upper class population flowing to suburbs in the United States, the population flow in Germany is more manifested from small and medium-sized towns to large cities and from suburban areas to central Urban area. This is mainly related to better employment and wage income in large cities.

After 2000, Germany's total population remained basically unchanged, but the proportion of population in big cities in Germany increased rapidly, from 7.6% in 2000 to 9.4% at present, with a cumulative increase of 24%.

The main reason for population mobility is that large cities have more stable economic structures and more employment opportunities, which can attract population inflows. Although the development of German cities is relatively balanced, the economic crisis makes enterprises in small and medium-sized cities face more problems and have poor ability to resist risks; in the face of employment pressure, young people also tend to go to big cities; investment immigrants also pull the attraction of big cities.

Germany's urbanization has basically ended, and it has completed the layout of population cities on the basis of industrialization and urbanization. Its urban system is multi-core and balanced development, with the characteristics of decentralization, characteristics and balance. According to German official data in 2006, Germany has 11 urban agglomerations, accounting for 71.98% of the population and 73.14% of the GDP. The balanced development of German cities largely stems from the development of different differentiated special industries, such as the medical technology research and development area in Tuttlingen, the exhibition area in Cologne, and the financial service area in Frankfurt. The populations of Berlin and Hamburg are only 3.4 million and 1.8 million respectively.

In 2004, Germany had 82 administrative districts with a population of more than 100,000, and 70% of the population was distributed in small towns with 2,000 - 10,000 people. Reasonable urban layout allows most German residents to be scattered in many small and medium-sized cities, and will not have the agglomeration effect of large cities or even very large cities, which will help keep house price increases in large cities within a reasonable range for a long time.

Most of the employment in the economic structure dominated by trade services and manufacturing is concentrated in the Urban area or near the Urban area, which will lead to more residential urbanization and employment urbanization. Because Germany's urban system is relatively scattered, even if its industrial level, economic strength, and population density are stronger than those of France, housing prices are still cheaper than those of France. There will be no huge regional differences in residents 'demand for housing, and there will be little difference in housing prices in different regions.

3.4 The primary goal of monetary policy is to control inflation and stabilize prices in the long run

Economic growth is the core factor driving the upgrading of social demand and the core driving force for urban construction and the expansion of residential housing scale. Before 1983, Germany's real housing prices and real per capita GDP basically kept pace with each other. Since then, real per capita GDP has steadily increased, but real housing prices have continued to decline. On the one hand, housing prices are not only determined by income, but also related to population size, population mobility, population structure, and urbanization; on the other hand, housing is not only a purely market issue, but also a social issue, and the government has the responsibility and obligation to provide housing security, especially in a "social market economy" system like Germany.

The stable development of the German economy provides a solid environment for the stable development of the housing market. The German economy is relatively stable and has never experienced two consecutive years of negative growth in 60 years. Except for the 2008 global financial crisis, which was minus 5%, the previous recession has never exceeded minus 1%. In the 1970s, as the German economy matured, population development, housing investment, and infrastructure construction all entered a stable period. The consumption structure of residents has also stabilized, with housing and related expenditures always being the largest consumption items for German households.

The Bundesbank's primary goal is to maintain price stability, followed by economic growth. Therefore, Germany has implemented a prudent monetary policy for a long time, maintained inflation at a low level for a long time, and basically controlled CPI within 2%. Against the backdrop of prudent monetary policy, German housing prices are basically consistent with these macroeconomic indicators, only after the 2008 financial crisis. Other indicators fluctuated sharply downward and then turned upward, and the house price index rose in a straight line. This was mainly due to the bursting of real estate bubbles in many countries, making German real estate more attractive to international investors.

From the perspective of money stock, Germany's M2/GDP is higher than that of countries such as Britain and France, but it does not mean that Germany's price level is higher than that of other countries. This is mainly due to its financing structure. Germany is a typical indirect financing financial system, relying on indirect bank financing rather than direct capital market financing. Higher bank loans lead to a relatively large amount of money, and M2/GDP is correspondingly higher.

3.5 Implement a long-term stable mortgage policy

Germany implements a "deposit first and loan later" contractual savings model and a fixed interest rate mechanism for mortgage loans to provide institutional guarantees for stabilizing home buyers 'expectations and house price levels. Germany implements strict separate management of housing savings business. Homebuyers will not be affected by changes in the country's macro-control policies, especially monetary policy, nor will they be affected by changes in interest rates such as inflation.

First, if German residents want to obtain a house purchase loan from the Housing Savings Bank, they must deposit the corresponding amount in the bank. Generally, the Housing Savings Bank will not pay the contract amount to the depositor until the deposit amount reaches 50% of the savings contract amount. Second, deposit and loan interest rates are fixed. Deposit and loan interest rates are 3% and 5% respectively, and mortgage fixed-rate terms average 11 and a half years. This long-term fixed mortgage interest rate plays an important stabilizer role in the mortgage market.

4 Revelation

1) Germany has reasonable housing prices and a low price-to-income ratio. It has maintained long-term stable housing prices and is "isolated" in the world. 1970-2015 In 2009, the nominal price index of new housing in Germany increased by 90%. After deducting the impact of inflation, its real price fell by 11.3%, and the real price-to-income ratio fell by 62%. Ten crises and nine real estate crises. Japan's real estate bubble in 1991 and China's subprime mortgage crisis in 2008. Countries around the world are generally tempted to stimulate real estate bubbles, and the collapse of the real estate bubble brings heavy costs. However, Germany has never experienced a serious real estate bubble and crisis.

2) Germany has long implemented a housing-oriented housing system design and guaranteed it in legal form. The German government has always regarded the real estate industry as an important component of the national social welfare system and has not overemphasized its status as a "pillar industry". The government attaches great importance to the development of high value-added and technology-intensive automotive, electronics, machinery manufacturing and chemical industries, achieving "Made in Germany".

Germany's Housing Construction Law, Housing Subsidy Law, Housing Leasing Law and Private Housing Subsidy Law provide respectively for the supply of social protection housing, low-and middle-income rent subsidies, regulation of the rental market and private housing. It provides a legal framework and is known as the "four pillars" of German housing policy.

3) Adequate and stable housing supply, standardized a developed rental market, low housing ownership rate and high rental ratio. After post-war reconstruction, by 1978, there were an average of 1.21 housing units per household, and the long-term housing shortage problem was alleviated. The German government vigorously promotes the construction of low-cost housing, and also supports the construction of welfare public housing. The government provides rent subsidies to residents based on family size, income, and rent to ensure that each family has sufficient rental affordability. 86% of Germans can enjoy different amounts of rental subsidies.

To protect tenants 'rental market, the Rent Law stipulates that rent increases cannot exceed 20% of reasonable rent, otherwise the landlord will constitute an illegal act and the tenant can sue the court; if it exceeds 50%, it will constitute a crime. The housing ownership rate is low and the proportion of renting is high. The average housing ownership rate in Germany has been more than 40%, and more than half of households solve their housing problems through renting.

4) Reasonable and stable return on housing investment, severely curb speculative demand and developers 'profiteering behavior. The German housing market has a relatively stable return on investment, stable between 4% and 5% in the long term. Germany has successively introduced a number of policies to severely curb speculative demand for housing investment and developers 'profiteering behavior. In housing transactions, if sold less than 10 years ago, a 25% capital gains tax is required. If the developer sets a price that exceeds 20% of the reasonable price, the buyer can sue in court. If it exceeds 50%, it will be classified as "making huge profits" and the developer will face high fines and severe penalties of up to three years in prison.

5) Germany's urban system is multi-core and balanced. According to German official data in 2006, Germany has 11 urban agglomerations, accounting for 71.98% of the population and 73.14% of the GDP. The balanced development of German cities largely comes from different differentiated special industrial clusters, such as the medical technology research and development area in Tuttlingen, the exhibition area in Cologne, and the financial service area in Frankfurt. Reasonable urban layout allows most German residents to be scattered in many small and medium-sized cities.

6) The primary goal of monetary policy is to control inflation and maintain long-term stability of prices. The Bundesbank of Germany has implemented a prudent monetary policy for a long time, maintained inflation at a low level for a long time, and basically controlled CPI within 2%. This tradition of the Bundesbank has also been passed down in the European Central Bank.

7) Implement a long-term stable mortgage policy. Germany implements a "deposit first and loan later" contractual savings model and a fixed interest rate mechanism for mortgage loans to provide institutional guarantees for stabilizing home buyers 'expectations and house price levels. Germany implements strict separate management of housing savings business. Homebuyers will not be affected by changes in the country's macro-control policies, especially monetary policy, nor will they be affected by changes in interest rates such as inflation.

First, if German residents want to obtain a house purchase loan from the Housing Savings Bank, they must deposit the corresponding amount in the bank. Generally, the Housing Savings Bank will not pay the contract amount to the depositor until the deposit amount reaches 50% of the savings contract amount. Second, deposit and loan interest rates are fixed. Deposit and loan interest rates are 3% and 5% respectively, and mortgage fixed-rate terms average 11 and a half years.

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