This paper analyses the European monetary policy and its effects on the real estate market. The prices for real estate in Germany are continuously rising at a steady level. High sought-after cities are not only affected by the positive price trend, but far beyond that also less sought-after regions. On the other hand, the European Central Bank has been pursuing a policy of low-interest rates for years, which has been extended by various purchase programmes, especially since the financial crisis and during the current pandemic. A connection between monetary policy and the development of real estate prices can be deduced. Many interest-bearing savings products are expiring, and the low- interest rates make a new investment less attractive. Besides, Germans do not like shares or bond as an investment, the demand for flats and houses, which are seen as supposedly safe investments, has increased. The past has shown how quickly an overheated real estate market can lead to price bubbles and severely shake financial stability.
Table of content
Table of content
List of figures
1 Introduction
2 Monetary Policy
2.1 Term discussion
2.2 Instruments
2.3 Expansionary monetary policy
2.4 Contractionary monetary policy
2.5 Approaches
3 Effects of on the European real estate market
3.1 European monetary policy
3.2 Current policy of the European central bank
3.3 The German real estate market
3.4 Influence of monetary policy on real estate
4 Conclusion
Bibliography
Internet sources
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