“Credit-financed booms in real estate markets play a crucial role for the severity of financial crisis and the associate costs for society. I certainly do not need to remind an Irish audience of the implications of a bursting housing bubble,” Prof Buch said. “Overall, indicators for the German real-estate market are sending mixed signals. “Taking into account everything we know, our current assessment is that we will have to continue monitoring the real estate market very closely,” Prof Buch said. “Tax incentives, subsidies, guarantees, subsidised loan programs - coupled with overly optimistic expectations regarding future economic developments - contributed to a build-up of excess supply in the real estate market,” she said.

Source: The Irish Times January 30, 2020 15:42 UTC