Consumer financial behaviour examined within the munich condominium market – How likely is it to expect a housing bubble?

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Authors
Betz, Eva-Maria
Issue Date
2018
Degree
MSc International Accounting and Finance
Publisher
Dublin Business School
Rights
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Abstract
The run on the Munich condominium market could have been observed for years. Among other large German cities, Munich is usually known as the most expensive one in terms of living space. People moving to the city and searching for an accommodation are exhausted about the lack of supply – combined with the high prices. Nevertheless, the demand for condominiums is still increasing, especially among private investors. Hence, some market observers sometimes even talk about a possible housing bubble. Thereby, one usually refers to market data only. The participants themselves, their motives, considerations and concerns are hardly paid attention to. In terms of this dissertation, the private investors’ operations, backgrounds and incitements build the research angle instead. By observing and assessing their decision-making processes and general behavioural patterns, one seeks to indicate, whether a housing bubble is likely to arise on the Munich condominium market. Guidance is given by the Efficient Market Hypothesis according to Eugene F. Fama (1965) and the Behavioural Finance theory introduced by Kahneman and Tversky in the 1970s.