In his commentary "The housing market could put the ECB in a bind," Deutsche Bank Research analyst Jochen Möbert assesses the current situation on housing markets. He says: "If inflation remains high, further interest rate hikes could lead to distortions on the housing markets."
In his opinion, housing markets would find it difficult to cope with further interest rate hikes and even "a full-blown interest rate crisis" would be possible in the event of further massive interest rate hikes. However, the author maintains that rising house prices in Germany are not a real estate price bubble.
In addition, the author expects that factors such as "negative real short-term interest rates, historic inflation protection from homeownership, a significant supply shortage, and rising rental growth" may lead to a stabilization of prices.
Source and further information: dbresearch.de/March/13/2023
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