Frederik Fischer, a 35-year-old editor, spent six months looking for the perfect flat — only to have his hopes dashed when he found the right place in Berlin’s Tempelhof district.

“Many banks thought the place was worth much less than what the market value was,” Mr Fischer says. “If you don’t have a lot of savings, then it’s a hard fight to find someone to give you a loan and cover purchase fees that are usually another 15 per cent on top of the cost.”

Mr Fischer secured a mortgage, but his struggle to get on the property ladder is an increasingly common problem in the eurozone’s largest economy. Once a nation renowned for low levels of property ownership, Germany is turning to home ownership in response to plummeting interest rates and a still-humming economy, with unemployment at its lowest level since the country’s postwar reunification in 1990.

But the transition towards home ownership is bringing Germany closer to fears familiar in many other property markets — that the country is experiencing a property price bubble and it will increase social divisions between those who can afford to buy and those who cannot.

“Living in cities is becoming increasingly difficult for average earners and households in the lower or middle-income bracket,” says Ulrich Ropertz of the Deutscher Mieterbund, an organisation representing tenants. Barbara Hendricks, housing minister in chancellor Angela Merkel’s government, has even proposed giving subsidies of up to €20,000 to families struggling to climb on the ladder in a political response to the unease.

Driving the housing push are some of the lowest interest rates on record. For many well-off Germans with permanent jobs renting no longer makes sense. Commerzbank, the country’s second-largest lender, offers a mortgage with an ultra-cheap 10-year fixed rate of just 0.94 per cent.

“We recently sold one apartment where the person who had been living there had been paying €1,200 a month without bills,” says David Schmitt, chief operating officer of Engel and Völkers, an estate agent. “The new owner’s mortgage repayments were €750 per month.”

At the same time as cutting borrowing costs, low interest rates are destroying many Germans’ hopes of a decent return on their savings. Property — dubbed Betongold, or concrete gold — has become a refuge for savers. They have been joined by international investors desperate to make a return in an era where the safest assets, like high-grade government bonds, are yielding negative interest rates.

Across the country, property prices were up 5 per cent during the first half of 2016. The greatest increases have been in cities such as Frankfurt, where prices of new-build apartments have risen 59 per cent since the beginning of 2008.

A building shortage is exacerbating the problem. Germany was on course to grant permits to build 368,000 housing units last year against the 400,000 homes analysts think were needed.

Matthias Pink, head of real estate research for Germany at Savills, argues that even this large shortfall masks the scale of the problem. “Most of the apartments being built are not the type that the majority of people can rent or buy,” Mr Pink says. “We need more affordable housing, especially in the metropolitan areas.”

Germany still has strong guards against any property market risk of the type that caused pain for buyers from Ireland to Spain. Claudia Buch, vice-president of the Bundesbank, said in November that there was “currently nothing to suggest excessive lending or weakening of credit standards”.

Fixed-rate mortgages are common — Bundesbank figures show 45 per cent of those who took out a loan this year will see their borrowing costs remain the same until 2026 regardless of what the ECB does with interest rates. Capital gains tax is charged on all properties sold within two years of purchase, or in the case of buy-to-let homes, 10 years, to discourage short-term speculation.

Philipp Wiesenecker, a 41-year-old lawyer in Frankfurt who recently took the plunge to become a first-time homebuyer, epitomises the attitudes of many in saying that he is not looking to make a fast buck on his investment. “The reasons were personal,” Mr Wiesenecker says of the neighbour’s house he purchased. “Seven minutes to the city centre, seven minutes to the riverside, seven minutes to the highway, seven minutes to the main station . . . the market value will rise, I think, but I did not buy it to make money.”

With no immediate economic threat, the most pressing concerns are social and — with elections due in 2017 — political. Ms Hendricks, a member of the centre-left SPD, has said she would like the cash giveaway for house purchases to be introduced in this election cycle.

Privately the finance ministry, led by Wolfgang Schäuble, a centre-right Christian Democrat, is sceptical the policy will do anything more than line the pockets of developers. Finance ministry officials think any significant policy changes are likely to remain on hold until after the election.

Mr Ropertz is also unconvinced, saying the grants would be “well-intentioned, but also very problematic”.

“We fear that this just fuels demand for property and prices rise. From experience, we know that government subsidies for home ownership are soon included in the price of real estate,” he says. “We do not need more owners, but more homes.”