Does the real estate market increasingly force more families to build?

Often, however, incomes are too low to afford effective repayment rates. Acquaintances of ours repay with 1 percent. Depending on the interest rate, it then takes 40 years to pay off.

Which raises two questions: 1) Did one have to enter into this deal? 2) Which bank sells something like this? And on the ECB/TARGET topic, to also somehow steer the conversation back to the topic: These balances mean that more euros flowed into Germany(!) than flowed out of Germany. This is partly due to Germany’s trade surpluses, but it also includes "flight money" from the southern countries. Some of this goes into real estate (especially in prime locations) and is thus also part of the price increase that prompted this thread’s topic. ----- Why invoices that have been paid are a problem if the person who already paid has, then falls into a subsequent insolvency (or devalues their own currency because they leave the euro) is German "insider knowledge" on this topic. In any case, one factual parameter of the world outside the central bank does not change: The money was received here, it was spent here or stashed under the mattress, what was acquired with it is still there after the balancing out of accounts, and what lies under the mattress is not affected by devaluation, because it is here and not in Italy or elsewhere. That this balance is recorded as a "claim" makes it sound as if something could be demanded with it. But in reality, nothing can be done with it, nothing bought, no investments, simply nothing, nada, zero. So if these claims disappear, one does not lose anything in reality either. No one loses anything when they eventually have to dispose of the invoices for things they once sold. The rising property prices hurt us today and now in reality. But how large the share of the mechanism described above is in the increase, no one can say. Interest rates surely play a significantly bigger role. And the questions 1) and 2) that I posed above are completely unaffected by that.

The loose monetary policy with extensive bond purchases by central banks is quite risky. In normal times, a central bank earns its money partly by banks refinancing with it. In times of zero interest rates, the securities that the Bundesbank holds on the asset side of its balance sheet yield little income.

Target2 balances: If a large country like Italy leaves the euro, there is a problem. This is not so far-fetched. A sustainable reform of the Eurosystem would certainly not be a mistake, whatever exactly this should look like.

Low interest rates and low repayment are a risky combination. Those who repay with 2 percent currently also need around 28 years depending on the interest rate. Not a short time either. The changed working world with more flexibility often requires more frequent moves. Also a point to consider. Home office exists. In many industries and companies, however, it still has a hard time.

If a large country like Italy leaves the Euro, there is a problem.

An epochal one even. It has nothing to do with TARGET and its balances. You vaguely and unclearly put forward claims. Also here:

Low interest rates and low repayment are a risky combination. Those who repay at 2 percent currently need around 28 years depending on the interest rate. Not a short time either. The changed working environment with more flexibility requires more frequent moves. Also a point to consider. There is home office. But in many industries and companies it still has a difficult position.

What is the point of this string of words?

I see it differently.

Decisive for a settlement of Target2 liabilities in the event of a Euro exit is the ability and willingness of the central bank of the exiting country to also settle the liability owed to the ECB. If this does not happen, Target2 can be a problem.

If this does not happen, Target2 can be a problem.

Which one? What happens then? Without an answer to this question, it’s all just speculation. We can discuss it from my side, but then please start a thread in the OT section. You remain indebted to answer the questions of why one absolutely has to finance at 1% redemption and which bank does so for what reasons. Such problems are very rare, I dare say.

Anyone currently repaying at 1 percent most likely does not intend to ever fully pay off the house, but only wants to live there until the end of the fixed interest rate period and then sell it again. This is uncommon here, but more common in other countries.