House prices in Germany fell significantly in 2023, according to the Bundesbank’s current Monthly Report. Residential properties were no longer affordable for many people owing to high inflation and increased interest rates. Demand for housing declined, increasingly shifting to the rental market, and the already high inflation in rents saw a significant further acceleration, the economists write. Overvaluations in the real estate market came down in 2023, but were not fully eliminated. The authors therefore believe that there is still a certain risk of price corrections.

A recent Bundesbank study looks at how cash will be used in the future. It outlines three different scenarios for cash payments in 2037. “The idea of the future scenarios is to help set the right course so that cash remains generally available and accepted as an attractive means of payment and store of value going forward,” explained Burkhard Balz as he introduced the study.