I say nothing will collapse as long as there is enough wealth in Germany and there continues to be an extreme excess demand for land. Meanwhile, financing brokers report that although the absolute numbers of financings are decreasing because not every Tom, Dick and Harry can get financing for any dump at moon prices anymore [..]. I know quite a few cases where (grand)parents simply injected six-figure sums or where plots of land worth several hundred thousand were simply handed over, so it’s not quite so dramatic anymore.
Just look at current figures – 2% repayment, 20 years, 3.5% interest – existing property with agent, project scope €750,000, about 160m² – let’s say there’s €200,000 to €300,000 equity – that comes to over €500,000 loan amount, and €2,500 monthly. Add the 160*€4 calculated operating costs of the bank and that already adds up to quite a lot of money for living – which should better be <0.4 of household income. So the example family would already have a net monthly income of €8,000. Certainly not the norm. Air will have to come out somewhere, in the existing stock or later in construction – or hardly anyone will build anymore. Because even if there is a lot of money, why should it be squandered like in the time when money cost nothing? The competition has become massively smaller.