And exactly here lies the problem. Banks grant loans with 1% repayment to people who actually should not be taking on a loan and of whom they know that in 10 years they will no longer be able to afford a follow-up financing and will never fully pay off the house in their lifetime.
I see myself as a civil servant with a secure and relatively good income for East German standards as a candidate for an average home where a basement should also be included. Only when offers for this already make me gulp because I would like to PAY IT OFF in 25 years (which is also relatively long), then how do people who both earn significantly less (because probably everyone would earn more under the current price situation in all areas) afford huge houses???
But the banks are happy when the repayment is low because they can thus generate the house price itself as profit once again at the expense of clueless (or insufficiently informed) borrowers.
And only in this way is the price spiral driven further upwards!
This was banned by the EU. Quote from Focus.
"For the borrower, this means that banks now demand more collateral to be able to grant a loan. Since the potential sale value of a property may no longer significantly factor into the calculations for granting a loan according to the new law, the borrower must either provide a lot of equity or be able to prove their creditworthiness with a substantial salary."
Regarding the price spiral: Try to get a 100m² apartment in a good location in Berlin for 600,000. You will succeed.
Please try the same in London, Paris, Moscow, New York, Hong Kong, etc...
As long as there is no war and Germany does not completely lose its relevance, real estate prices only know one direction.
In the event of a sale by the bank, the "profits" that exceed the remaining debt, by the way, go to the debtor.