The alternative financialization of the German housing market

While many European countries experienced a global housing boom in the early/mid-2000s, house prices and mortgage debt in Germany stagnated. Therefore, the German housing system is considered to be operating outside financialized capitalism. Despite Germany’s apparent stability, we argue that an alternative trajectory of financialization in the German housing market can be observed. This trajectory has followed three stages or ‘waves’. The first wave started around the time of German unification and is characterized by the failed attempt of West German banks to marketize and liberalize German housing finance. The second wave started in the late 1990s and is characterized by the ‘financialized privatization’ of many public housing associations and the speculative investments of private equity firms and hedge funds. The third wave started during the global financial crisis and is characterized by booming housing prices and the market entry of listed real estate companies.