Developments in residential property financing are important for the national economy. As the experience of the recent financial crisis has shown, loan defaults can pose a considerable threat to financial stability. Given rising prices and low interest rates, the development of credit volumes is being scrutinised particularly critically.
A Risk Assessment for Residential Property Financing in Germany
IW-Trends
German Economic Institute (IW)
Developments in residential property financing are important for the national economy. As the experience of the recent financial crisis has shown, loan defaults can pose a considerable threat to financial stability. Given rising prices and low interest rates, the development of credit volumes is being scrutinised particularly critically.
In fact, however, an empirical model shows that the growth in credit volumes is considerably weaker than might have been expected under current circumstances. Moreover, data on loan-to-value ratios, amortisations, loan periods and the borrowers themselves give no indication of additional risks. Further tightening of residential property financing is therefore not only unnecessary but would actually have an unfavourable effect on households and banks.
Daniel Bendel / Michael Voigtländer: Eine Risikoprüfung für die deutsche Wohnimmobilienfinanzierung
IW-Trends
German Economic Institute (IW)
More on the topic
Options for affordable new construction
Due to the mix of higher interest rates and increased construction costs, new residential construction in Germany is in a very difficult situation.
IW
Housing for the Elderly
Many older people share the desire to be able to live independently in the familiar surroundings of their own home for as long as possible. Accidents and illness, however, can soon put an end to such autonomy.
IW