German bank: ‘Biggest real estate crisis since financial crisis’ as contagion spreads.

German bank Deutsche Pfandbriefbank AG has issued an unscheduled statement warning of the “greatest real estate crisis since the financial crisis”. This comes amid concerns of increasing provisions on debt extended to property owners after rising interest rates eroded the value of buildings worldwide. Treasury Secretary Janet Yellen expressed similar worries about commercial real estate, although she noted that she believes the problem is manageable. Analysts predict a further writedown of up to 15% may be needed this year. Other banks, such as New York Community Bancorp and Aozora Bank, have also been negatively affected by the commercial property market slump. Deutsche Bank AG recorded provisions for losses in US commercial real estate that were over four times bigger than a year earlier. Property-focused German banks are feeling the greatest strain.