Home financing ever possible? Probably not!

The people were once again fed nonsense by the "experts." Almost every banker said that interest rates would remain this low for decades. The result can be seen now.

Europe has caused the inflation itself, and Germany has allowed itself to be used for it. The expenditure side has exploded due to illegal unlimited immigration. The price is paid by the hardworking citizens with ever higher taxes. Now comes the Green destruction of prosperity, and the downward spiral is spinning faster and faster.

The Greens wanted to ban single-family houses; since this is not enforceable, they have now taken the opportunity to bring construction to a complete standstill with regulations and subsidy cuts.

I watch all this comfortably from my armchair; I have my affairs in order. The German youth are currently ruining their own future and prefer to glue themselves to the asphalt. Abroad, people study, research, and create diligently. Prosperity does not arise by itself.

Europe has caused inflation itself, and Germany has allowed itself to be harnessed to the cart. The expenditure side has exploded due to illegal unlimited immigration. The hardworking citizens are paying the price with ever higher taxes. Now comes the green destruction of prosperity, and the downward spiral is spinning faster and faster.

That is exactly what I wrote here last year and was massively attacked from all sides for it and even called a wrong-way driver. Yet Germany is the wrong-way driver because, in conjunction with 26 EU states, it is the only country that wants this policy.... No one else wants it....

I also believe that it is too easy to blame ONLY immigration, but in fact it is also a redistribution of wealth: People who work have less and less due to inflation, and more and more people are coming who are entitled to citizen’s money including housing and health insurance.

We are still talking about absolutely low interest rates when we talk about 3,xx percent. Soon we will be talking about 8,xx percent.
Statements here in the forum that the key interest rates have no influence on construction interest rates are accepted without contradiction. So why don’t we have 1 percent construction interest and 4 percent key interest rate? What nonsense. Yes, the interest rates have to go down. But why actually?
Nothing is going down at first. On the contrary, it will rise significantly further. With 10 percent inflation and 5 percent real interest rate, we still have negative interest rates.
The money supply is currently shrinking drastically. To values like in 1929. As I predicted before, we are plunging into a liquidity crisis.
The first big bank in the USA just collapsed last Friday. More will follow. With high probability, real estate prices will crash. We are entering a depression. Rising interest rates, still high inflation, and falling money supply.
A very explosive mix. And no one should believe that the Americans will risk the stability of the US dollar. Even if they have to raise interest rates to 20 percent.
Basically, we are turning exactly to the opposite extreme. Instead of zero interest rates and money supply expansion with flooding the markets with cash, we are now turning in the other direction. But that was to be expected.

The key interest rates will not rise much anymore, inflation will ease and settle somewhere between 3 and 5 percent. Construction interest rates will thus remain fluctuating at the current level.

The stock markets will cool down, possibly even a crash. Fixed deposits will become attractive again.

Building will no longer be lucrative or possible for a few years. House prices will continuously decline slightly, but increases are possible depending on the location.

Well, it will still take some time until the first homeowners who financed at too low interest rates face a follow-up financing. But if you only repay 1% with 1% interest, with a €500k+ property you will certainly struggle a lot at 4%+ interest, because almost nothing has been paid off.

I think there are quite a few properties financed like that which will come onto the market in a few years. But honestly, my sympathy is limited. With a €500k loan, 1% interest and 1% repayment, in most cases you have to ask yourself whether the financing wasn’t unhealthy from the start. If a higher repayment wasn’t possible, then the project was already overambitious back then. And if it had been possible and you preferred to live it up instead – well, what can you say? The option that interest rates could rise over the years isn’t exactly new.

Were there really such financings? I financed around 1% and it never went below 2%, usually even 2.5% repayment. No bank would do that. If at all, only with much smaller financing amounts (but then the residual debt is not a problem either) or other securities in the background.