Confronted with such an extent of turbulences, high level of volatility and overshooting, unprecedented in the industrialized financial systems since World War II, both public authorities and the industry have responded swiftly to cope with the new situation and to draw all lessons from the present episode in order to avoid recurrence of such an abrupt and disturbing correction in the future.
Credit risk may be underestimated, and the recovery value of collateral overestimated. This is one reason why the real estate market remains a focal point of our analyses. To date, the pandemic’s impact on the market for residential real estate has been barely visible. In the second quarter, prices for owner-occupied housing across Germany rose by just under 7% compared with the previous year.