( AP ) - Property buyers have for several years been pouring money into previously little-known and little-visited European states, such as Montenegro and Lithuania. Yet there is one, much more prominent country that they rarely consider - Germany.
The collapse of the Berlin Wall in 1989 heralded a unified future for Europe's largest economy. However, in spite of a strategic, central position on the continent, excellent infrastructure, picture-postcard historic cities and stunning geography - including unspoilt forest and mountain regions that rival the best of France and Austria - neither notable interest nor investment by individuals in residential property followed.
Berlin, the heavily regenerated and revitalised capital, has been winning attention, especially from Danish, Spanish and Irish buyers. But, according to UK-based Alpha Real Estate Investments, the German property market as a whole is the world's most undervalued, as measured by the Organisation for Economic Co-operation and Development. And this is particularly the case in the eastern half of the country.
International indifference does seem to be waning, though. For example, Primelocation.com, the property website, says that searches for eastern Germany were up 235 per cent in the first six months of this year, albeit from a small base, while enquiries from German estate agents and developers wishing to list properties have risen significantly, a reflection of perceived demand from foreign buyers.
Poor economic performance, including high unemployment; the huge cost of integrating the formerly communist east since reunification in 1990; and an oversupply of housing after heavy investment supported by tax advantages in the following decade are all still a worry. But experts say the market could soon be on its way up, simply because it has been depressed for so long, with prices declining by about 1 per cent annually in the past five years. Nice homes are available, often for a fraction of the cost of similar ones in many neighbouring countries, and property in the east is priced at as much as a third lower than that in the west.
The five new federal states of the former East Germany - Thuringia, Saxony, Brandenburg, Saxony-Anhalt and Mecklenburg-Lower Pomerania (Vorpommern) - all have much to offer. Cities such as Erfurt, Leipzig, Potsdam, Weimar, Dresden and Madgeburg are steeped in history and artistic heritage, while the Baltic coast, the lakes of Brandenburg and Pomerania, the mountains of Saxony and Saxony-Anhalt and the Thuringian forest are ideal for outdoorsy types.
The communist era caused considerable hardship but there was no 1960s reconstruction boom as in the west, so many historic buildings were preserved and large tracts of the countryside were left untouched.