Private retirement provision and free saving alongside financing?

Basically, I agree with you, equity is simply enormously important. However, I can't and don't want to afford everything, despite having an equity share of over 40%. Since we are still very young and children will only come after the build, we definitely don't want to get carried away with something. I also want to still be able to go on vacation when the kids arrive, and since we don't know what children will cost us, we will only take out as much credit as to not exceed 25% of our net income. Our only option then is to scale back, instead of the desired 220m² it will be "only 170-180", instead of a double garage it will be a double carport and whether I can still fit the bus system in, I also doubt... But I already know that I probably never have to worry if we can afford it as long as we don't come up with completely crazy ideas. But honestly, even 170m² is more than enough – especially for people like us, who have lived in a 60m² 2-room apartment in Munich for the last few years.

Of course, all of this is relative. The absolute numbers are unimportant. One person treats themselves to 120 instead of 90 sqm, another 170 instead of 130, and another 220 instead of 170. I find the 25% rule of income very sensible, and we are a bit below that as well. Of course, we can't and won't afford everything either. In the neighborhood, there are houses with 350+ sqm and 4 garages attached. The number of bathrooms can only be guessed at. Compared to that, we're building "small." Still, the current status is 870k (all-in).

Regards, Steffen

Well, in every neighborhood there is just a social housing building.

An essential aspect for me regarding a property is the disciplining mechanism. If I know that I can only keep the house if I pay my installments (and it doesn't matter whether I earn a lot or a little or have financed generously or tightly), I am practically forced into building wealth.

That is all correct, except for the wealth building. It's difficult later on to exchange a few unnecessary square meters for bread rolls, medical treatment, or care. The house is consumption, not wealth (at least as a first approximation).

It is illiquid assets. But a 30-year fixed deposit would be as well. If necessary, the house can be sold and you can then buy your bread rolls with it.

Yes, it counts as assets, I was rather implying that you don't usually get rich from building a house. Living in a single-family home simply costs a lot of money, that money is then gone.

If I close a bank savings plan over 30 years today, I will have very liquid cash upon retirement by the way (for some it would be more or less than 30 years, depends.). (And of course always under the assumption that there will still be cash then.)

House sale? Sounds easy. How many old people actually do that? And is the proceeds enough for a new start? Not everyone builds in a desirable location ... Not everyone knows which location will be in demand in 30 years. Not everyone compensates for value losses on the house over the years. ...

I don’t understand why people always assume that they would have a lot more money if they saved the money instead of building a house.
The point of building a house is that I don’t pay rent.
But if I don’t build the house, I pay rent – whether for a house or an apartment. And usually, that’s not just 100€, but between 500-1200€, depending on the location, size, and features of the rental apartment/house.

I don’t know how others calculate, but for me, it wouldn’t be possible to pay both rent and still put the monthly loan amount that would otherwise go towards the house into a savings account.
Precisely because rent is due.

This double burden is already a problem for some builders during the construction phase and hits the wallet quite hard. So how is that supposed to work for 20 years or longer?

Saving is all well and good, but I just don’t understand how anyone can compare that.

I would see it this way: I pay 700€ rent for a 100m² apartment, for example.

If I build, I have a monthly installment of 1200€.
So first, I have an extra burden of 500€ per month without operating costs, so I put those 500€/month aside.

Over 30 years, that’s 30x12x500€ = 180,000€.

With the 1,200€ per month, however, I repay nearly 300,000€ in loans over 30 years. Of course, interest still has to be factored in and the comparison isn’t quite that simple, but it shows where this is going.

Or am I making a mistake in my reasoning?