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Daniel Bendel / Michael Voigtländer IW-Trends No. 4 11. January 2017 A Risk Assessment for Residential Property Financing in Germany

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.

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A Risk Assessment for Residential Property Financing in Germany
Daniel Bendel / Michael Voigtländer IW-Trends No. 4 11. January 2017

A Risk Assessment for Residential Property Financing in Germany

IW-Trends

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German Economic Institute (IW) 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.

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A Risk Assessment for Residential Property Financing in Germany
Daniel Bendel / Michael Voigtländer IW-Trends No. 4 11. January 2017

Daniel Bendel / Michael Voigtländer: Eine Risikoprüfung für die deutsche Wohnimmobilienfinanzierung

IW-Trends

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German Economic Institute (IW) German Economic Institute (IW)

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Pekka Sagner / Michael Voigtländer in International Journal of Housing Policy External Publication 6. May 2022

Supply side effects of the Berlin rent freeze

On 23 February 2020, the Berlin Senate introduced the Berlin rent freeze (‘Mietendeckel’). The law was repealed on 25 March 2021. The Berlin rent freeze was an unprecedented market intervention in the German housing market.

IW

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Michael Voigtländer / Jonas Zdrzalek IW-Trends No. 1 14. April 2022

An Analysis of the Current Risk Levels in Residential Real Estate Financing in Germany

The German Federal Financial Supervisory Authority (BaFin) is keeping a watchful eye on the granting of housing mortgages and from 2023 on will require lending banks to increase their equity capital to cover potential risks.

IW

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