Home prices in Germany's largest cities rose faster than rents in the first half, leaving some of them facing the prospect of a bubble, Jones Lang LaSalle said.
Prices in five cities, including Munich, Hamburg and Leipzig, climbed more than twice as fast as rents, the property consultancy said in a report.
"A normal price/yield ratio no longer exists, and that leads us to suspect bubbles in some places if the trend continues," said Andrew Groom, head of valuation and transaction advisory at Jones Lang LaSalle's German unit.
German homes have seen strong demand as buyers seek a safe investment amid the euro-zone debt crisis. Investors bought €6.4 billion (HK$65.12 billion) of German residential property in the first half, more than the €5.8 billion that was spent in all of 2011, Jones Lang LaSalle said.
Home prices rose the fastest in Munich, jumping 23 per cent to €4,240 per square metre. Rents gained 8.8 per cent to a monthly €13.15 per square metre.
"The price spiral in some sections of Munich can no longer be explained by fundamentals," Groom said.
In Berlin, prices rose about 20 per cent while rents gained 13 per cent. Earlier this month, billionaire investor George Soros said Berlin home prices were at risk of becoming overvalued.
"You have a serious danger of a housing bubble developing in Berlin," he said at a panel discussion in the German capital.