Construction costs are currently skyrocketing

Maybe it is sorted differently for you - my first hit is a "Schmuckzaun Barcelona" and it costs about 50€ per meter. In general, under "Schmuckzaun" you can of course also find much more expensive models.

I just read an interesting article in the major Frankfurt daily newspaper about the current trends in real estate financing. Interestingly, the situation with old buildings is quite different from the impression given here.

"According to data from Dr. Klein, about 67 percent of financings were for the purchase of existing properties a year ago, recently it has been almost 85 percent. Financing for new owner-built homes has decreased significantly. In January 2022, their share was 22 percent, at the beginning of 2023 it was 12.7 percent. The share of developer-built new homes fell from 10.7 to 2.4 percent. A similar trend is seen at Interhyp.
Interest in older properties has also increased. Buildings constructed in 2020 or later accounted for one third of all first financings at Dr. Klein a year ago; currently it is one sixth. In contrast, the share of properties built between 1950 and 1979 has risen from 25 to 34 percent.

Interhyp also reports for 2022 that customers bought older and smaller properties. From 2020 to 2021, the properties financed via this broker were on average 38 years old, by the end of 2022 it was 46 years. The average living space of financed houses decreased (from 161 to 156 square meters). The average living space of apartments, however, remained the same at 80 square meters."

Funny that with our age and the 140 sqm second-hand property from 1840, we exactly fit the growth group. :)

I believe that too. Properties built before 1980 (unless it’s a contaminated prefabricated house) will not drop significantly in price. Because unaffordable new construction inevitably leads to used properties becoming more expensive as well. Not at the absurd post-Corona level of 2021 (500,000€ for 150 m2 built in 1975), but rather at a normal 2019 level (450,000€ for the 150 m2 from 1975). Because the outlook for existing properties is very good. Collapsing new construction due to inflation/material costs => higher interest in existing properties => fewer and fewer existing properties, since there is hardly any new construction anymore if it is unaffordable for most. There will be a normalization of at most 10% for existing properties to the 2019 price level to partly offset interest rates. But there will be no further decline, since building land is extremely scarce and single-family homes are politically unwanted by some, making the existing stock automatically more attractive.

"According to data from , about 67 percent of financing was for the purchase of existing properties a year ago, recently it was almost 85 percent. Financing for new owner-occupied buildings has declined significantly. In January 2022, their share was 22 percent, at the beginning of 2023 it was 12.7 percent. The share of developer new builds fell from 10.7 to 2.4 percent. Similar trends are shown by .
Interest in older properties has also increased. Buildings constructed in 2020 or later still accounted for one-third of all initial financings at Dr. Klein a year ago; currently, it is one-sixth. In contrast, the share of properties built between 1950 and 1979 has risen from 25 to 34 percent.

The quote lacks absolute numbers to draw meaningful ratios and thus conclusions about what is currently happening in the real estate market. For example, the share of financing for existing properties may have increased, but the trade in used properties might still have shrunk.

The data from the article actually shows only what is already obvious regarding buying: Due to increased interest rates and inflation, many can only buy the older and therefore cheaper houses or smaller houses, or build smaller.

I believe that too. Properties built until 1980 (unless it's a contaminated prefab house) will not fall significantly in price. (...)

Hard to imagine. Anyone buying an existing house from this era will almost inevitably have to renovate it and, starting from 2024, must install a heat pump as part of that. In turn, this requires a complete energy retrofit. That only makes sense if house prices plummet accordingly.