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Real Estate Price Bubbles as Irrational Exuberance. A Critical Analysis of the German Real Estate Market

Real Estate Price Bubbles as Irrational Exuberance. A Critical Analysis of the German Real Estate Market

Paperback

Investing & Finance

ISBN10: 3346874125
ISBN13: 9783346874122
Publisher: Grin Verlag
Published: May 2 2023
Pages: 56
Weight: 0.19
Height: 0.13 Width: 5.83 Depth: 8.27
Language: English
Bachelor Thesis from the year 2022 in the subject Economy - Real estate industry, grade: 1,3, Hamburg University of Applied Sciences, language: English, abstract: The development of real estate prices is of extraordinary importance for the financial and economic system, as undesirable developments could endanger financial stability, as seen in the subprime crisis, which eventually evolved into a global financial crisis. The same month the dot-com bubble burst, the Nobel Prize winner and current book author Robert J. Shiller published the non-fictional, bestselling first edition of his book, named Irrational Exuberance, in which he explains his research on the occurrences and the causes of historical financial crises, while supplementing the conclusions with aspects of behavioural finance and social studies. As Shiller's assertions are mainly based on the US market, research has been conducted to clarify whether his housing index and the concept of irrational exuberance can be applied to the German real estate market. By the detailed consideration of selected aspects of the book in connection with the conception of academic literature, this thesis finds that his ideas can principally be transferred to assess whether the German real estate market currently exhibits bubbly tendencies. This assessment is conducted, however, there are limitations in the sole consideration as an indicator as well as in the critical evaluation of the German real estate market.

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