Market Extra: The German housing boom is starting to look ‘like a bubble’

A boom in Germany’s formerly staid housing market is in danger of turning into a bubble, according to economists at Commerzbank.

And it is no surprise who they blame.

“The housing boom in Germany is looking increasingly like a bubble as house prices steadily decouple from fundamental factors,” wrote economists Ralph Solveen and Marco Wagner in a note late Thursday. “The main driving force is the [European Central Bank’s] very expansionary monetary policy, which is unlikely to change much in the foreseeable future.”

German house prices had been flat for years. Germans, in contrast to Americans and Brits, have long preferred to rent their homes rather than buy.

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