Allianz chief warns of real estate bubble
Published: 22 Oct 2012 09:46 GMT+02:00
Updated: 22 Oct 2012 09:46 GMT+02:00
- Housing becomes more expensive nationwide (17 Oct 12)
- Foreign investors 'snap up prefab German flats' (04 Sep 12)
- Property prices soar but 'no danger of bubble' (02 Aug 12)
Maximilian Zimmerer told Monday’s Süddeutsche Zeitung newspaper that Germany could experience a real estate bubble with extremely high prices suddenly crashing.
“The bubble would not be driven by large institutional investors, but by private investors, who fear inflation and the collapse of the euro and are trying to escape by buying property,” Zimmerer said in the interview with the paper, his first since taking on his job.
“I see risks building up for the future,” he told the paper. “The central banks are flooding the world with cheap money. Low interest rates lead in the long run to misguided investments. The real estate bubbles in the US, Spain and Ireland have shown that.”
Zimmerer said that Europe was “on the way to recovery” from the euro crisis, and that the economic bloc needed more time to let the structural reforms and austerity measures take full effect.
He also made a plea for concessions for Greece, arguing that the country needed more time to return to economic growth. The country has called for two more years to complete its cutbacks, which the German government and other donor nations have so far rejected, the paper reports.