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Berlin Home-Price Gains Beat Rents as Demand Increases

July 10 (Bloomberg) -- Advertised prices for Berlin apartments rose more than twice as fast as rents in June as housing demand in Germany’s capital outpaced construction and low borrowing costs encouraged buyers.

An index measuring asking prices for apartments in the city in June rose 15.6 points from a year earlier to 161, while a rent index rose 7 points to 140.7, according to data compiled by online broker Immobilien Scout GmbH.

“It would be misleading to attribute this to the start of a bubble,” Michael Kiefer, Immobilien Scout’s chief analyst, said in a statement today. “Other factors, led by demand, play an important role.”

More people are buying homes in Berlin as the city attracts professionals with higher incomes and investors take advantage of low interest rates. At the same time, legislators plan to introduce new rules to keep rents in check.

Officials in cities including Hamburg, Berlin and Munich plan to make it unlawful to raise rents in certain neighborhoods by more than 15 percent over a three-year period, officials said last year.

Berlin posted the strongest price gain among Germany’s five biggest cities, followed by Munich, which had a 12.2-point increase. Across Germany, prices and rents rose more slowly, both measures gaining 5.3 points, Immobilien Scout said.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net Andrew Blackman, Jeffrey St.Onge

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