How is a 400k loan financible without equity? Net equity at €4,500

But it was also normal that an income was enough to support a family. It was normal that collective wage agreements raised wages above the inflation rate. It was normal that interest on savings accounts was paid at 6 or 7 percent. It was normal that building land was dirt cheap, it was normal that you didn’t have to spend enormous sums on energy-saving measures because heating didn’t cost a fortune. It was normal to have a family exempted from real estate transfer tax, and so on.
Many of the single-family homes from the 60s have large plots, lots of living space, full basements, masonry garages, etc. Sure, that cost something even back then, but just try to afford such a thing these days as an average earner in an acceptable location...
Today there are towel-sized gardens, hardly any basements, often just a carport... and nevertheless such things are no longer affordable for more and more families or you have to move very far away from the nearest metropolitan center.
The times are hard to compare, but I do believe that an average-earning family with 1.5 incomes was better off with home ownership in the 60s than today.

Oh dear, I almost want to ask about your age and background when you make such bold claims.
By pure coincidence, you describe almost exactly the circumstances and times as I have EXPERIENCED them myself and not just know from books or homeland films. There is – as always – a drastic difference between having read/heard something and having personally experienced it.
My father went straight from his workday and a snack to the next job or into the garden for vegetables because supermarkets neither existed nor were affordable. My mother walked two hours early every morning into the forest while eight months pregnant with me, worked there for 8 hours doing forestry work, and then walked two hours back home. There was no husband working from home (he was at another workplace until 8 p.m.) and no dishwasher or washing machine, etc., but a child who played outside alone after school or was with relatives until mom came back home. No antenatal classes or other wonderful things we have today (I have heard of them), no, I was even born at home (in the living room during the moving period).
What you are telling is... sorry... absolute nonsense. Plots of land (ours had 420 sqm) were often also used for subsistence in the 60s, full basements for storing fruit, potatoes, food, etc. (and not for saunas or gyms), and yes, large living areas only for very few (we had 90 sqm with two families, one bathroom plus guest toilet). Back then there were not many construction companies, because they were all on their own sites themselves, first to arrive and last to leave (what do they call it today 7/24).
What you consider today as a so-called "average earner" is something completely different than back then (today with partly nice collective agreements, occupational disability insurance, insurance of all kinds). If you had to live today in the standard you describe as a comparison, you would cry all day instead of complaining that you are being forced to build energy-efficiently – sorry.
In 1960 there was predominantly NO central heating, but boilers and wood stoves, and hardly anyone had a car (our school route was 5 km on foot, to the swimming pool 7 km, each way).
You write "only a carport," oh dear... back then people did not even have a car, and the family’s old bike stood by the house wall.
I don’t know what movies you have seen or maybe someone from the generation that built in the 60s does not want to offend you, but you can tell after one sentence that you have sat through a fairy tale or are telling the story of one of the very few.
Interest? Maybe there were even 10%, no idea? The average citizen (whom you call "average earner") didn’t know that because he had no money to invest anyway. You are clearly talking about a very small group of people at that time, you should mention that.
I find it almost annoying and narrow-minded of you that in the year 2020 in Germany!! you complain so much and glorify the good old 60s without having a clue about it.
I read that you apparently suffer and complain, sorry; but that has nothing to do with the decade or Germany, even if you can certainly view many things critically today.
I can show you places in the world where people live today more or less as a parent generation did in the 60s you mentioned. You should live there for just a single year under identical conditions; not as a day trip from a cruise ship or as a "visit to locals and their oh-so-typical traditions"... as a real life with really ALL side effects, fears, and worries.
I repeat myself: you would run crying back home and never go there again AND... you would no longer judge things you don’t know at all.

In another thread, I related the construction costs of the 60s to real wages. Yes, it was easier back then because construction costs were significantly lower. But: the standard of living has also changed massively. This becomes clear with the example of costs for telecommunications and entertainment:

What did this item include in 1960 and how much was it: Possibly 1 telephone connection (not yet common at the time), 12 DM basic fee.

What does this item include in 2020 and how much is it: 1 DSL connection, 1 mobile contract per person, Netflix/Amazon/online subscription, total costs per family somewhere between 100 to 200 euros.

Yep, agreed. We were a completely normal family in the "new development area" (something completely different than today). No one in the entire street had a telephone, there were exactly two cars (long street), no bus (playing on the street without interruption), we and our neighbors got telephones in 1971, similarly with TV (2 programs from 5 p.m. to 11 p.m.). The word subscription did not exist in the dictionary, but there were discount stamps and milk cans. Even if it may sound sad, it was the opposite. Just like children today feel more comfortable in mud or the construction pit than in a princess room. The standard of living has not only changed, it has exploded, and yet I kind of like it. We kids just went along, today they partly determine family life and the father winces. Building was backbreaking work, which you could see on the hands and faces of every family member up to grandpa. I don’t want it that way anymore, please no, but some people here probably only know it from TV with a glass of Californian wine in hand.

Unfortunately, that's how it looks. Of course, it may have been somewhat easier to build a house in the past. But only because there simply was nothing else to spend your money on. The (very expensive) Metz lasted 20 years, and whether it was 1k, 2k, or 4k probably didn’t matter to anyone.

I recently talked to my grandma about her building back then. They built in 1955 on a field, nothing around it. No supermarkets yet. But there was already something like today’s general contractor. Other houses or even a street only came from 1960 onwards. Three generations lived in the house. Grandma downstairs, then four upstairs with a shared kitchen on the ground floor. The central heating only came 10 years later. Before that, they heated the parlor downstairs as well as upstairs - but with coal. For that - and vegetables from their own cultivation - there was also the cellar. The first car only came in 1970.

However, my grandma now has 800 sqm of land with a nice house all to herself, with a land value index of 250€.

Building has probably always been expensive and meant sacrifices. However, I’m probably having it much more comfortably because my problem will be the optimal design of the heat pump and automated shading, and I still have enough budget left for regular vacations. I wouldn’t want to trade places with the past.

However, I’m also writing these lines on a setup of two monitors on my "gamer PC," while my MacBook and iPad lie next to me, and my wife is working on her notebook, with her iPad probably lying somewhere. Oh yes, my company notebook is also lying somewhere in the bike bag. I resist adding up the new acquisition values to illustrate why I think it’s so hard to build a house today. It’s simply the consumption and standards that are taken for granted today.

You described that wonderfully and my current situation does not differ insignificantly in terms of technology, tools, and whatever else. That is also a good thing and why should one make life harder than it is. It’s not as if people today don’t have problems; the problems of an individual (one included) feel just as heavy as mine did back then, as a child of parents with little money. I absolutely understand that everyone has their own problems and sometimes carries them heavily. Today I struggle more with the choice of stairs or heating technology than I did before with the decision to build a two-family house. Nevertheless, I can and one should be able to recognize that that generation back then certainly did not have it easier and could just build their dream house. You just listened to your grandma and that’s why you know it. If you tell her that she got it easy because she had 6-7% interest, etc., she will say... boy... I’ll tell you something - And yet they made a good life for themselves in their simple way and mostly worked everything out ALONE and HARD, which they can be proud of. Yes - today many things are also difficult - but the apples-to-oranges comparison of the previous speaker could not be left as it was. It would be very difficult for all of us (including me) to scale back again.

Comparisons of times and prices are pointless. What we can learn from the past today: Very content people could live with much simpler and less sophisticated standards. Here I read a lot about how a house must be more expensive than usual if it stands on expensive land, that simple cars would look pathetic next to a beautiful house, that a lot of money for outdoor facilities must be calculated in right from the start, that this and that is simply "standard"... We have become very demanding, sometimes more demanding than our wallets allow. We exert social pressure on each other about what "one" should have and do. That makes people unhappy. I’m not going along with that anymore. And I can give the same advice to homeowners with €4,500 net. Decide for yourself, set priorities, and confidently refrain.

We were a completely normal family in the "new development area" (something completely different from today).

And that is also the crucial point that you, in my opinion, somewhat overlook in your review of three generations. The described employment activities were certainly not those of the top 15-20% of incomes back then. Today, however (with exceptions), these are the only ones who can manage a new construction project "with their own hands." Today it is simply no longer possible through sacrifice to start a new build for 500,000€ if you do not bring a certain income & preferably capital. Another point is – 60 years ago there was only one direction – upwards, things always got better & it also felt that way. Today that is not the case. Of course you get gimmicks very cheaply, but the saturation level is correspondingly very high. You can get a drone for 100 euros. Phones can do everything and cost almost nothing anymore. You have more streaming content than you could handle in three lifetimes. But the feeling that everything is getting better is definitely no longer there. Everything is getting more expensive, and the number of those who can still keep up is getting smaller and smaller. This is also and especially true when it comes to building a house.