Construction costs are currently skyrocketing

Yes, but even then. At different stages of life, you have different needs for living space. Now I'm moving "to the countryside" so the kids have a green garden. In old age, when my eyesight is poor and my back is broken, so I can't keep the house and garden in good shape anymore, I move back to the city apartment with an elevator that I didn't sell back then but rented out. In old age, I probably couldn't afford to buy an apartment then and rent one as well, it's also uncertain in a metropolis like Berlin. Apart from that, as an investment, owning a single-digit number of residential properties is not really sensible. Especially no single-family houses. If anything, rental garages or something like that.

Unfortunately, I sometimes can't edit here in the forum. I was referring to the post by Traumfaenger, who already owns a house. The second property would therefore be at most a holiday home if we still want to talk about personal use.

I agree with myself. For me, it was about the primary property, which has the advantage of self-use and an increase in the standard of living while at the same time providing retirement provision.

But how many loan defaults are we talking about here?

I am not talking about defaults here but rather that potential buyers can no longer afford it. A 400k loan at 3% interest is about a thousand euros a month just for interest. That doesn't include any repayment yet. With repayment, the rate is correspondingly higher, and a 400k loan is not gigantic either. Here in Konstanz, in 2020, a 3-room old building apartment was already upwards of 500k, so you bring quite a bit of equity to get by with a 400k loan.

I am not talking about defaults here, but about the fact that potential buyers can no longer afford it. A 400k loan at 3% interest is about a thousand per month just in interest. You haven’t paid off anything yet. With repayment, the rate is correspondingly higher, and 400k loan is not gigantic either.

Exactly, no one is talking about loan defaults yet – they will only come in the next 6-12 months. It will happen very quickly, because we remember – the strange one-third rule for household income is outdated, 40%-45% just for the loan is no problem, and all jobs are completely secure. Now suddenly money is already missing due to additional expenses for food & co. – and the energy bomb is yet to come.

“Affordability” simply also applies "backwards" – only those who still have enough left per month today can benefit from the good interest rates & prices in construction/purchase in the next 3 years. Those who were already stretched thin back then are now quickly getting into trouble.

So I have now looked at the evaluation of the Immoscout statistics on Wirtschaftswoche, and for the Düsseldorf/Cologne region we are talking about an average price decline of -0.1 to -0.4 % for single-family houses. That means to me that new builds were probably even traded at higher prices. You cannot lump the Kfw40 house together with the 1900s old building. I don’t see any drama in the development here, quite the opposite.

Exactly, see above, the old villa with 4-meter-high ceilings is now being traded differently than the energy-efficient new building. The people here in the forum who are currently building or have just finished building can probably watch the development relatively calmly. Especially since the Handelsblatt recently assumed a price increase of up to 20% for new buildings over the next 2 years. That wouldn’t surprise me with the current inflation either.

As already discussed here in the forum, Cologne is simply not much affected by the bubble – the purchase price to rent multiples showed this very clearly. Last year still values like from 10 years ago. In this respect, there is a bias in your description.

Elsewhere, it looks much more dramatic – prices have already fallen by 10% - 17% on offer. The realized price is usually still much lower, if the deal is realized at all. This applies equally to old houses and new houses with bubble prices. Because there is now more supply than solvent buyers. And they know that too. So if someone has to sell their house now, it will certainly go less favorably than a year ago. And anyone who bought at peak prices in the last two years may not get their money back for it anytime soon.

But those who don’t have to sell and can still afford their house despite all the increased costs obviously have no problem. But – there is a limit, and it is definitely shifting right now. The great 190m² house, which was once put up somewhere with minimal insulation and gas heating, with 1% repayment and 10 years fixed interest rate, to make it somehow affordable with the average income, may now prove too expensive despite everything, and suddenly good advice is expensive..

I mean, who still buys a non-renovated house with 40-60 mwh heating demand?!
No matter if XPS, Klemmfilz, or Kerndämmung. Everything costs at least twice as much as it did 12 months ago.