At first glance it seems like good news: Politicians and real estate experts in Germany insist there is no bubble in the country’s housing market.
And it’s even what members of the Bundesbank, the guardians of Germany’s financial stability, are saying. In fact it’s such good news that the central bank repeated it recently in its annual report.
But if there is one lesson to be learned from the many decades of recurring financial crashes, it is that one should never trust the reassurances expressed as part of a herd instinct.
First of all, a bubble is only recognized when it bursts. Second, the lack of action by our financial market watchdogs means one thing above all: Prices could continue to rise uncontrollably. And they will.
Especially in big cities, prices will not only rise unchecked, but will in fact continue to rise at an accelerated pace. After real estate prices were driven up by low interest rates, a housing shortage and international demand, the refugee wave has been added to the mix this year.