© Reuters. FILE PHOTO: Facades of apartment buildings with micro apartments are pictured at Mitte district in Berlin, Germany, August 29, 2019. REUTERS/Axel Schmidt
BERLIN (Reuters) – Germany’s Bundesbank is worried about banks lending to overextended buyers in an overheated property market and reserves the right to impose additional curbs, board director Joachim Wuermeling was quoted as saying on Wednesday.
He told the Handelsblatt business daily the issue of residential property loans continued to rise, although buyers were bringing less and less equity with them.
“The growth is taking place in a market that is becoming increasingly vulnerable because of rising property prices,” he said, adding that there was a danger of buyers becoming over-indebted.
Wuermeling said rising interest rates also posed a threat, as banks had promised customers fixed interest rates for 10 years on more than half of all housing loans for private households.
“In the middle of an interest rate turnaround, banks would still have very low-interest loans on their balance sheets for a few years, but would already have to pay higher interest rates for refinancing,” he said.
Germany’s Bundesbank warns over bank loans to hot property market -report
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.