‘Concrete Gold’ is the best phrase we’ve heard today. From the morning email of SocGen’s Kit Juckes.
The most challenging piece in this morning’s FT though is the one about Germany’s property rush, which is based on concrete gold according to Claire Jones. Sebastien Galy and I have both written about the property boom in Germany before, and it is gathering steam. Frankfurt’s population is growing rapidly. I can’t help thinking that for Germany, Fed policy has delivered rates that are too low. Indeed, while overall Europe has monetary policy that is far too tight and an excess of savings that will continue to threaten deflation, the overvaluation of the Euro is a bigger problem than the level of rates. So is the de-leveraging of the banking system which prevents those rates being available to most borrowers (outside Frankfurt).
The article referred to is here.
For Germans these days, some things that do not glitter are gold. A property boom across the biggest cities has been dubbed a betongold — literally concrete gold — rush.
In Frankfurt’s well-heeled Westend, Michael Stegerwald has been selling kitchens for two decades. Last year was his most successful yet.
The German property boom certainly gives the Bundesbank concerns. And it’s a story repeated all over the world (Frankfurt, London, Vancouver etc.). There’s been talk about property in premier cities as being a new “reserve concerncy”) but “Concrete Gold” or betongold is much niser.