Something needs to give
Sep 20, 2022
Central bank largesse has given a boost to housing markets globally in the years since the financial crisis. Interestingly enough, price increases in Germany appear to have been even more extreme than in the US. With increasing mortgage rates, inflation and rising energy costs, we cannot see how private households can continue to pay higher prices for owning property. With a 10 year US Treasury at 3.5%, rental yields are also becoming less competitive compared to safer government bonds. Something needs to give.