Good offer for a young family? Buy yes or no

I read that due to demographic change the market is supposed to be oversaturated by 2025

According to demographic change, Germany should have had a population decline since 2000. However, due to labor migration, this has not happened so far. House prices in Bavaria have increased by an average of 6% in recent years. Even if there is stagnation - I would not bet on falling prices. Here in Nuremberg, apartment prices have risen by 8-10% since early 2020 - despite Corona and the crisis, etc.

I actually only know people who would like to build. The market is so empty that there is simply no building land left. The waiting lists in new development areas are sometimes three to four digits long... I do not see prices falling as long as every piece of land goes away at top prices. There is no saturation as long as demand is so enormous.

At some point the market is saturated, isn't it? I have read that due to demographic changes the market is supposed to be oversaturated in 2025 and prices will definitely fall then.

But I don’t believe that in Bavaria. The influx in the greater Munich area is too large for things to change quickly. It somewhat depends on whether your offer corresponds to the market value or is 50k to 100k below. That determines whether you can find something comparable again in 2-3 years.

The decision is not easy and you have to make it and stand by it.

By the way: We don't live 40 km away from you. In our development area, the land price was 700/sqm and the list of applicants was three digits long, so there is still room for improvement on your side...

Some say that buying a house in 2020 and thus also in 2021 is quite a stupid thing to do... Under 1% is not possible with so little equity.

That was said ten years ago as well. And what happened? Every year there was a price increase of 5-10%. As long as there are well-educated young people with a desire to build a house who can afford to finance 650,000 in 2021 or 800,000 euros in 2028, it will not get cheaper. Today, as well as in the future, there are three applicants for every building plot. People do not stop having children either. Rather the opposite. I see many young families here with three children. In my time, most had only one to two children. There is always inheritance, the baby boom generations will retire in 10 years, and the young people will then be able to choose their jobs. I see the whole thing more as a price driver.

I think it’s good that you recalculated precisely and reflected on it critically. I only partly share your pessimism and wouldn’t postpone everything by 10 years right away. As others have already pointed out, prices will most likely not go down. And saving strictly for 10 years, in addition to paying rent, simply doesn’t yield that much. If saving €15,000 per year were realistic, then you wouldn’t have to worry about the house either. For example, you can also have nice holidays that don’t cost much. Flying and hotels are then rather out of the question; vacation rentals outside the main season (in some destination countries, this also aligns well with holiday times, e.g., Denmark over Pentecost) work well. Campsites can also be very nice and are rarely expensive. My parents went on many holidays with us three children but never spent a lot of money on that.

Yes, it’s not an easy financing, and whether it will work well or not depends heavily on your lifestyle. You can see it in both ways accordingly. The important question here is simply how much your wife will work again. A maximum of 30% will be problematic, as we have already seen. 60% or more would certainly be better, and the children don’t necessarily have to be latchkey kids if you organize well and even have grandparents living nearby. I wouldn’t necessarily fear a big wave of bankruptcies now either. So far, short-time work has successfully prevented large-scale loan defaults, and money will be distributed liberally at least until the next election. The government can’t really afford anything else if they want to be re-elected. And in the time after that, the economy will recover again in the medium term. There will be a time when some sectors will have it somewhat tough, but at the moment, I don’t see a big crisis or sharply falling prices. If that were the case, I wouldn’t build myself but wait until prices go down. A much higher risk I see, however, is that there will be higher inflation rates in the next few years, let’s say around 4-5%, which would help in reducing debts (of the home builders and the states). Of course, you can count on that just as little as on an inheritance, but it definitely should be included in the risk assessment. If that happens, the plans to save up and buy in 10 years are definitely a shot in the dark.