Residential property loans continue to rise – cause for concern?

Dr. Franz Eilers and Thomas Hofer, vdpResearch

According to common indicators, the German housing market is showing increasing signs of a very powerful upturn. Rents and prices are rising faster, construction and transaction volumes are hitting new highs, while lending and credit volumes have recently started to pick up again. Some market watchers consider that these observations provide evidence of a critical development. The media, at any rate, have recently begun to refer to the possibility of a debt fuelled housing bubble in Germany.