Photo: Peter Kneffel / dpa
According to the assessment of the major bank UBS, Munich and Frankfurt lead the world in terms of the risk of a real estate bubble.
The cities showed the clearest signs of overheating among the 25 metropolises considered, the Swiss money house announced on Wednesday in Frankfurt.
"No other city in the world is as exposed to the risk of a real estate bubble as Munich and Frankfurt," said
, UBS chief investment strategist in Germany.
In its "Global Real Estate Bubble Index 2020", the bank calculated values of 2.35 and 2.26 for Munich and Frankfurt - with more than 1.5 points there is a risk of bubbles.
This puts them ahead of world cities like Paris and London.
Toronto, Hong Kong, Paris, Amsterdam and Zurich are also considered clearly overheated with values above 1.5 points.
London, Geneva, New York and Sydney, among others, are rated as "overrated" with values of 0.5 to 1.5 points.
Munich defended its top position in the ranking and left Frankfurt, Amsterdam, Hong Kong and Toronto behind within a year.
"That's an exclamation point," said study author Matthias Holzhey.
With the economic boom and a doubling of housing prices in a decade, Frankfurt is "a victim of its own success".
The corona crisis is now becoming the litmus test of whether the high prices are justified.
In Munich, the strong local economy and solid population growth continued to fuel the real estate markets, while too little new living space was being created.
State aid stabilizes real estate markets
UBS defines a real estate bubble as a strong and persistent discrepancy between the price level and fundamental data in cities - such as income, economic growth and population migration.
However, if you consider how much of their income qualified employees have to spend on a 60-square-meter apartment close to the center, Frankfurt and Munich are far behind Tokyo, Hong Kong, London and Paris.
The stability of the real estate markets despite the Corona crisis can also be explained by the state aid for the economy, which saved many people from a loss of income.
The real estate markets also lagged behind the economy.
Despite the global recession, inflation-adjusted price growth for residential real estate has accelerated in the past four quarters.
The consequences of the pandemic, such as falling incomes and more home offices, are likely to weaken the demand for housing in city centers.
In contrast to prices, the direction of rents is already going down in some places.
cr / dpa