Dear Ron,

With interest I read your article on the CFA-website regarding a German real estate bubble. I'm triggered by your graphs and opinion. For a next article, I would suggest to incorporate some of the following factors in your equation:

- Longterm price development: what happened in the last 20 years?

- Rent-to-Income levels: which portion of their income do German's spend on housing costs; and how does this compare to eg France/UK/Swiss/Austria?

- Loan-to-Value levels: are German property investments highly geared?

- Interest levels: what does debt cost private homeowners in Germany?

- Prices per sqm: what does the average apartment cost per sqm in one of the big-7 cities Dusseldorf, Cologne or Stuttgart, and how does this compare to eg Vienna, Antwerpen or Utrecht?

- Length of trend momentum: how long have historic property price cycles taken?

Maybe these data could add to your argument?

(As a hint and side-note: German property prices where at the same price level in 2008 as in 1990; German's still enjoy affordable housing with housing costs 25% of income; German's have to bring 30% equity for purchases; bank margins on mortgages are low; prices/sqm are significantly lower than in other European cities, and property-price uptrends usually last for 10-15 years)

We are now 1 year post your column; and German propertyprices have gained further, Should I be wrong in 2 years from now (and should you be right); please be sure to bring it to my attention ;-)

Kind regards, Ben from Amsterdam