The stability of the German housing market

摘要: The last decade has been marked by cycles of excessive boom and bust in the housing market. However, not all countries have experienced high volatility their house prices. Indeed, Germany unique retaining flat price levels over whole period failing to respond any macroeconomic shocks. main reason for this stability can be found real estate finance existence a sophisticated rental While other monetary stimuli are effectively transmitted economy via market, German insistence on prudential lending isolates market from financial distortions. By demanding deposits, aligning mortgage value instead offering predominantly fixed-rate mortgages, banks reduce risk defaults thus contribute This system evolved as result regulations but which enables households save own funds purchases. This, turn, explains preference mortgages.