Well, savings and loan crisis and in its wake banking crisis USA 2005 to 2008 is how I remember it. Real estate prices exploded, driven by low interest rates. Houses were more expensive than people’s incomes allowed. Savings banks and partly banks in the USA financed it anyway, with the argument that if things got tight, they could always sell the house at a profit, but when that didn’t work, loans that were securitized and passed on burst, these securities suddenly were only junk. With inflated prices and excessive credit demand, that cannot be denied in some parts of the country here either. And that people finance for 30 years and then still have 150 thousand remaining debt, in my opinion that is a ticking time bomb. But it is posted here as a financing offer.
On the Iberian Peninsula it was different. Also there the driving force was low interest rates. But then developers built massive numbers of apartments and condominiums beyond demand. The whole thing could no longer be sold afterwards, so the loans burst there. In 2010 we were at the Algarve and admired the ruins. Kilometers of vacant, ready-to-move-in unsold holiday properties... I don’t see that currently in Germany.
However, it’s all crystal ball. The only sure thing is, the economy has never only gone upward. Karsten