German Property Boom?
The Bundesbank has recently released a report on the state of the German property market - click here for the report and here for the Economist's coverage of the story. The Bundesbank fears that property prices are 20% overvalued. Is this concern an example of the Bundesbank's inert conservatism or is its concern well placed? Given that the Great Crash of 2008 and the Eurozone crisis had their roots in overvalued property markets, the Bundesbank is probably correct to be concerned about this development. In addition, the ECB's low interest rates will make it relatively easy for borrowers to finance house purchases in Germany.