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German central bank warned of overheating of the real estate market

The Bundesbank is concerned about the widespread rise in prices for houses and apartments in Germany. “According to our calculations, prices for residential real estate are 10-30 percent higher than the real value,” – said the vice president of the Central Bank of Germany Claudia Buch… This was announced by the German magazine SPIEGEL on November 25.

“Rising real estate prices could be critical to financial stability if more loans are issued with significantly looser lending standards,” Bukh explained.

According to a representative of the Central Bank, about half of bank loans for residential real estate have a fixed interest period of over ten years.

“At the same time, a high proportion of long-term loans and investments makes the German financial system vulnerable to interest rate risks,” said Claudia Buch.

The central bank also announced that overall …

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