Bundesbank: German House Prices may be Overvalued

Housing prices in several cities in Germany could be overvalued by as much as 20 percent, according to the country’s central bank.

In its monthly report released Monday, the Bundesbank warned that price rises in urban areas “are difficult to justify based on fundamental factors”, although there are no signs of substantial exaggerations in the German housing market in general.

“Over the past three years, the prices for houses and apartments have risen by a total of 8.25 percent. This is due to a ‘marked gap between property prices in urban and rural areas’,” the bank said in its press release.

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