ECB experts: Real estate market overheated
The real estate bubble in Europe continues to grow concludes the European Systemic Risk Board (ESRB), chaired by ECB President Mario Draghi. According to the annual ESRB report, commercial real estates are overvalued in most EU countries.
The ESRB said, “high investor demand and the search for higher yields, which have been a major source of the CRE price increase, particularly in prime markets, have potentially made investors vulnerable to a repricing of risk premia”.
In contrast, growth in commercial real estate lending is limited at the moment: In Germany, Italy and Spain, even fewer loans were granted in 2018 than in previous years. Reuters
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