Money capital in search of a safe haven: Theory and politico-economic base of the current housing crisis in Germany.

The housing question is back on the agenda in Germany. House rents in urban areas in particular, where the vast majority of habitants are renters, are on the rise since the outbreak of the global financial and economic crisis in 2007/08. The first part of the article articles discusses David Harvey’s notion of the secondary circuit of capital in order to provide a politico-economic theory for a better understanding of the economic base of these processes. Harvey’s central argument is that the flow of money capital in search of investment opportunities is “switched” into the sphere of real estate in times of overaccumulation. The second part of the article provides empirical data on construction activities, buying and selling of built environment and the development of land prices, including speculation, in Germany that all point in the same direction: the secondary circuit is gaining in importance in the past ten years. Further, the data shows the geographical unevenness of these processes, as most activities are located in major cities.The housing question is back on the agenda in Germany. House rents in urban areas in particular, where the vast majority of habitants are renters, are on the rise since the outbreak of the global financial and economic crisis in 2007/08. The first part of the article articles discusses David Harvey’s notion of the secondary circuit of capital in order to provide a politico-economic theory for a better understanding of the economic base of these processes. Harvey’s central argument is that the flow of money capital in search of investment opportunities is “switched” into the sphere of real estate in times of overaccumulation. The second part of the article provides empirical data on construction activities, buying and selling of built environment and the development of land prices, including speculation, in Germany that all point in the same direction: the secondary circuit is gaining in importance in the past ten years. Further, the data shows the geographical unevenness of these processes, as most activities are located in major cities