Can Legal Institutions Calm ‘Animal Spirits’ on the Mortgage Market? Insights from Germany
Fecha: julio 2019
Isabel Schnabel, Matthias Lehmann
Mercado hipotecario, regulación, Alemania, Cajas de ahorros
While the market for immovable property is prone to boom and bust, there are important differences depending on the country in question. Germany has benefitted from a particularly stable mortgage market since the 1950s. Amongst others, this may have been the result of institutions specific to German law. This contribution examines whether peculiarities such as the Pfandbrief (a version of the covered bond), the Bausparkassen (building savings banks) or the stringent protection of tenants were root causes of stability. It also describes possible challenges that have led to recent hikes in real estate prices. The question at the heart of this contribution is whether law can contribute to stabilize the market for immovable property.