Health, Myths, Fraud and the Crisis

The history of the Weimar Republic teaches that real estate prices offered only limited protection against hyperinflation and only if one was living in his own home.  Maintaining a house during periods of high inflation becomes very expensive due to constantly rising material cost. Of course a house usually survives a currency crisis whereas cash in a bank account does not.

In 1922 apartment rental prices were capped by the government and adjusted for inflation, rentals were only a fraction of what they had been before WWI.  Consequently house prices were falling. However, rates and taxes on real estate sales were raised.

  • Berlin raised the capital gains tax on real estate sales to 30%.
  • In July 1924  home prices had dropped about 80% since 1918.
  • From about 1935 to 1950 rental prices were “frozen”
  • In 1952 “debt profiteers” had to pay a “mortgage gains tax”

RE offers wealth preservation in a currency crises, albeit one must be able to pay for maintenance and government levies and taxes. Moreover I assume that RE prices in a hyperinflation scenario are not increasing as much as  gold and silver, if at all.

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