Financing comparison: past vs. today

To be honest, this is too much of a mess for me to follow the jumble of numbers.

Me too. There are also too many variables and assumptions that are incorrect.
And yes: I am also one of those who say that you shouldn't complain about 2.5-4%. I know how much my father financed for himself back then…

Let's gladly go through your numbers factually. Because assuming my husband is not yet in early retirement, then we would roughly have your €5000 net income! So that matches for me to follow along.

But let's gladly look at your year 2000. We bought in 1999. Not built, because it was too expensive for us. Nevertheless, our modest single-family house also had a financing need of approx. 180,000 DM, simply put €90,000.
But we were interested in another used house… then the capital requirement for us was as you suggest: …

) €45,610 equity €182,440 capital requirement

…..also the €180,000! With, by the way, €50,000 equity..

According to the household net income assumed above of €3,370,

Only, our net income was 2400 DM each… which converted together is 4800 DM, so again simplified halved in €: €2400. That has nothing to do with your €3,370
Interest rate back then: 4.5% results in approx. €900 repayment at 2% amortization with a €2400 salary.

Charming calculation! What’s more, with pregnancy or a child, one salary would have completely disappeared and one would have received €150 (300 DM) as compensation. Not 60, 70, or 80% salary… (or whatever that is today)

>>>>>Today €5000 salary
2012 €3800 salary, interest rate 2% mixed rate
1999 €2400 salary, interest rate 4.5%<<<<<<

What one buys or builds with it is ultimately up to each individual.

Many building plots have to be returned, houses have to be sold (numbers are increasing significantly)

I have read this several times now or heard it in personal conversations, but so far I have not been able to find any meaningful statistics on it. Are there any numbers on this, or is it just hearsay? If there is something on this, what should I search for?

Not built because it was too expensive for us. Nevertheless, our modest ERH and also a financing requirement of about 180,000 DM, for simplicity 90,000€.

And at that time you also received T€ 10 home ownership allowance for the existing property (even T€ 20 for new construction). Home ownership allowance loans were taken out in large numbers – they were paid off by the state within 8 years.

And back then, you also received T€ 10 home ownership allowance for existing properties (even T€ 20 for new builds)

Recently, there was the Baukindergeld. I could simply take 36,000€ with me. Lucky me.

Subsidies come and subsidies go. It is always difficult to catch the right timing.
With every new government, there are changes, and in a few years, everything will look completely different again.
Maybe in two years, renovations of old buildings will be super attractive, who knows.

We have often described the problem, interest rates are rising, but prices are still the old ones. With a bit of waiting, this will settle again. Supply and demand. No demand due to high interest rates causes prices to fall. In the meantime, build up equity. Or in the meantime, have children for the next family subsidy ;)

I have read or heard this several times in personal conversations, but so far I haven't been able to find any meaningful statistics on it. Are there any numbers on this, or is it just hearsay? If there are, what should I look for?

This will probably only become visible in statistics later. Only three or four weeks ago, reports about last year's dream prices were still being published.

But if you have been observing a local market for a longer time, you can already notice differences. New offers almost daily (quality aside), and suddenly plots of land that have been on the market for a long time appear in the newspapers. Even without an interest rate turnaround and recession, the end of the cycle was always a possibility, and the hot air from the Bundesbank study shows up to 40% price overvaluation in the market (before the last round of price increases driven by panic buying near the deadline).

Affordability is simply driven by interest rates – despite high incomes and equity, in May 2022 simply less is possible than a few months earlier. This still has to be processed – there are still some sellers looking for that one special buyer who gets up every day. Are there still many of them?

Commercial purchase contracts are even being reversed because the buyers (institutional investors/funds) no longer want to buy at the current interest rate level. Or payment is made from equity to finance only when it becomes cheaper again. If it becomes cheaper again...