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 market 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.

There is a widely held opinion among German economists and political scientists that long-term stability is an essential feature of the German housing system (e.g. Just, 2010; Kofner, 2014a; Voigtländer, 2014). Characterized by a predominant private rental sector, conservative mortgage banks and a low homeownership rate (Lowe, 2011; Schneider & Wagner, 2015), the German housing system is often perceived as the corporatist, non-financialized and somewhat ‘boring’ counter-example of the more liberal and financialized US housing market (Kofner, 2014b; Kohl, 2014; Schwartz & Seabrook, 2009). While many European countries saw an unprecedented increase in housing prices during the early and mid 2000s, housing prices and mortgage debt in Germany stagnated or declined (Andrews et al, 2011; Detzeretal, 2013). In other words, it is sometimes believed that the market has remained largely unaffected by the dynamics associated with financialized capitalism. While in many European countries housing markets became increasingly connected to global financial markets and exposed to financial risks (Aalbers, 2016), the specific composition and characteristics of the German housing market seemed to have offered some protection against the caprices of global finance.

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