Financial and Real Estate Markets

Here the economic significance of the finance and real estate markets is monitored and researched.

This research unit is concerned with the macroeconomic importance of financial and property markets. Our economists analyse the development of the financial markets, monetary policy and the markets for real estate. They examine the latest proposals for legislation and conduct studies for companies, business associations and ministries, focusing on the links between financial markets, real estate markets, and the economy as a whole. The potential consequences of this interdependence were well exemplified by the recent global financial and economic crisis, which started in the American real estate market. In addition, the unit addresses the structural challenges facing the property sector, including an ageing and shrinking population, climate change and corporate financing. Immobilien-Monitor, the quarterly bulletin which reports on activities in the field of real estate economics, is available by email and by download from this website. Further information is available online at Several topics of the research unit intersect with topics in taxation, business cycles or social issues, why we often collaborate with other units of the institute. Although many topics focus on Germany, there is a strong connection to European policy-making, especially in the fields of financial regulation and monetary policy. Furthermore, most of the research is also applicable to other EU member states.

Sections of the Research Unit

  • Monetary and Financial Policy: The researchers monitor the ECB’ monetary policy and developments in the European banking sector and they analyse the impact of monetary policy and financial regulation on the real economy. Research is based on own banking databases and sophisticated empirical methods.
  • Corporate and Real Estate Finance: The availability of funding for investments is essential to economic growth, while the regulatory environment is crucial for the way in which real estate investments and enterprises are financed. Due to new financial regulations, like Basel III or Solvency II, the framework for corporate and real estate financing will change. We analyse their effects on markets thoroughly and derive suggestions for improvement, if necessary.
  • Housing Policy: The provision of housing is a social need. We analyse the effects of state interventions on the housing market and contribute to the debate on sound designs of housing regulations. Topics are rental regulations, the set-up of housing allowances, tax rules related to housing and incentives to stimulate energy efficient renovations.
  • Real Estate Economics: The real estate market is one of the biggest and important markets in the economy. Recent experiences in the United States and other countries show how distortions in the real market can initiate a deep recession for the economy as a whole. We monitor the market regularly and develop methods to detect overvaluations. Also, we analyse the impact of demographic trends and derive solutions for growing and shrinking communities.

Findings and Positions

  • Financial Regulation: In response to the financial crisis the paradigm for financial regulation has changed. It seems obvious that banks and insurance companies need more equity capital as a buffer against losses to improve financial stability and to prevent taxpayers from future bail-outs. In addition to the financial stability perspective, regulations should also take into account the social function of financial intermediation, i.e. funding the real economy. We aim at designing the financial regulation such that it balances between the robustness of the financial system and the funding needs of the real economy.
  • Monetary Policy: The Eurozone banking and sovereign debt crisis forced the ECB to conduct unconventional monetary policies that resulted in a low interest rate environment. Although necessary to prevent a deep recession, this policy triggers negative side-effects, e.g. stimulating an overshooting of property markets. To prevent distortions in financial markets and the real economy the ECB should return to its neutral stance as soon as possible.
  • Housing Policy: International experiences revealed that interventions aiming at limiting housing costs, like a rent freeze, have unintended side-effects. For instance, the lack of a bigger rental market in Spain and the UK is due to excessive rental regulations in the 1960s to 1980s. A sound housing policy should aim at using market forces to reach social goals. Instead of extending social housing, we prefer a system of housing allowances which enable low-income household to participate in the overall market.
  • Demographics and Real Estate: Germany is facing a shrink of its population, especially in rural areas and cities with structural problems. As a consequence, the vacancy rate of residential properties is increasing, instigating further problems for owners and the community as a whole. We are convinced that communities need support to deal with these problems. This includes incentives for households to move to the inner suburbs, selected removal of buildings and an extended supra-regional planning.


Michael Voigtländer

Head of the Research Unit Financial and Real Estate Markets

Tel+49 221 4981-741


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Markus Demary

Markus Demary

Senior Economist for Monetary Policy and the Economics of the Financial Markets

Tel+49 221 4981-732


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Ralph Henger

Ralph Henger

Senior Economist for Housing Policy and Real Estate Economics

Tel+49 221 4981-744

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Björn Seipelt

Economist for Housing Policy and Real Estate Economics

Tel+49 30 27877-102


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