Buying your own house has become more popular in Germany during the past decade but, with only four out of 10 homes owner-occupied, most Germans still prefer to rent. This is particularly true of big cities such as Berlin, Hamburg and Frankfurt, where property is expensive but rents can often be remarkably low.

Houses built before 1920 are rent-controlled, so some spacious flats in gracious, old buildings in Berlin cost as little as £150 a month. Tenant-friendly legislation provides security for tenants and encourages landlords to view property as a long-term investment. Thus, most Berliners still stay out of the property market unless they have a lot of money to spare.

After a surge in the early 1990s, prices have fallen in recent years but are expected to pick up next year, when the government moves from Bonn to Berlin. What could you get for £100,000? A two-room flat, measuring about 50 square metres, within a couple of miles of the centre of Berlin would be one option. The better the district, of course, the smaller your apartment will become, so that, if you want to live in one of the swankier streets of Charlottenburg, you will have to make do with a studio measuring about 35 square metres.

If your heart is set on a house, you will have to move to the furthest edge of the city - quite a distance when you consider that Berlin, with all its forests and lakes, covers the same area as Greater London. Even then, you will probably have to make do with a tiny, newly-built, terraced bungalow, far from shops, trains, buses and schools.

If you build a house as an investment, the German taxman will allow you to write it off, but building a home to occupy yourself wins few tax breaks.

One reason for Germany's low level of owner-occupied homes is a national horror of debt in any form. This means families will often wait until they have saved the full price of a house before they buy it. (It is worth remembering, in this context, that Germany is one of the world's richest countries, with more than £4,050 billion held in savings and private property.)

Low interest rates and the temporarily depressed state of the market mean that buying property in Germany is a good idea right now, but you need very deep pockets if you are looking for more than a cosy little flat for one.