In his commentary "The housing market could put the ECB in a quandary", analyst Jochen Möbert from Deutsche Bank Research assesses the current situation on the 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 his view that rising house prices in Germany are not a real estate price bubble.
The author also expects that factors such as "negative real short-term interest rates, historic inflation protection through home ownership, a significant supply shortage and rising rental growth" could lead to a stabilization of prices.
Source and further information: dbresearch.de/March 13, 2023
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