Real estate bubble Germany
Property prices in Germany have increased significantly in recent years. After the global housing crisis just over a decade ago, fears are once again being raised that there could be a housing bubble in Germany. Experts warn that in many regions of our country, house and condominium prices are already clearly approaching a period of overheating. But how can the potential dangers of a real estate bubble in Germany really be assessed?
We would like to shed real light on the situation to determine whether a new property crash is likely or not.
What factors could trigger a bursting of the German real estate bubble?
Overheating in the real estate markets is often evident in advance. Prices are no longer rising and there are already significant price falls in some areas. For example, these factors can trigger the bursting of a possible real estate bubble in Germany:
- Economic downturn on a broad basis
- Massive interest rate hikes on the capital markets
- Political influences in the form of higher taxation of real estate
In addition, bursting a real estate bubble can also have regional causes. For example, if a motorway is planned as a result of a policy decision to change infrastructure near a previously quiet residential area, in most cases there will be drastic price losses for the affected residential areas.
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What is the current situation on the markets in relation to a real estate bubble Germany?
In order to assess the situation of the real estate markets in Germany, a look at these factors is crucial:
- Development of key interest rates on international capital markets
- Population development in Germany with a view to migration
- Continued boom in urbanization in Germany
Development of key interest rates on the international capital markets:
Interest rates on global capital markets have been at a low level for years. There is some talk of zero interest rate policy for the near future. This makes investments in savings products and fixed-income securities uninteresting. Persistent inflation is even destroying capital on these securities. Stock markets have also shown significant market fluctuations in the context of the Corona crisis. Only the real estate markets are stable in value and even show increases.
Population development in Germany with a view to migration:
Germany is a country of immigration. As an economically successful location, our country is attracting more and more people from abroad. This leads to an increase in the population and thus to a greater demand for housing. For this reason, it is unlikely that there will be a real estate bubble in Germany in the near future.
Continued boom in urbanization in Germany:
The trend of immigration in the attractive metropolitan regions in Germany is unbroken. There are excellent working conditions and an excellent leisure offer. In view of the development of real estate prices, especially in the large cities in Germany, this means rather further rising real estate prices.
In view of the market development so far and the prospects for the future, a real estate bubble Germany at the current level is rather unlikely.
Do you have any questions or would like to test the real estate franchise?
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