Report: Building a house as retirement provision? No way!

And just for further reflection: The median I have indicated here (~2100€) I calculated myself from the median gross income (which is more plausible to find). I found no statistics for net income for pure full-time jobs and therefore calculated it myself using tax class 1.

In real life, however, there is only income with which one has to get by. The median net income for singles in 2017 was 1666€, for the Muster family (father, mother, 2 children) it was 3498€.

The source here is the official social reporting from the federal government and the states.

1666€ or 3498€ gross or net?

EDIT: One should also read properly

Thus, the Muster family cannot start a building financing in 2019 without a healthy loan-to-value ratio. 1400€ living expenses flat rate, 1200-1400€ installment, 400€ ancillary costs. Leaves a savings rate of 300-500€. No vacation and only problems if something breaks (car, washing machine, etc.)

Thus, the Mustermann family cannot even start a construction financing without a healthy loan-to-value ratio in 2019.

And that with more than one salary!

The €3498 includes €385 in child benefits. Income of people starting a family tends to be slightly higher than €1666 each, yet it is evident that after deducting child benefits, there is one full-time and at least one part-time job here. If not two full-time jobs.

If the Muster family wanted to build a house today as the grandparents could back then, with one salary and the child benefits, they would have to manage everything with €1666 + €385 child benefits. That would be the median income compared to earlier times when only dad was working.

Ta-da ta-da ta-daa... it is simply sad!

EDIT: And capital income as well as savings on rent through homeownership are also already included in these figures – so these are not pure earnings from employment!

And that with more than one salary!

The 3498€ include 385€ child benefit. Generally, the incomes of family starters are slightly higher than 1666€ each; nevertheless, you can see that after deducting child benefit, there is a full-time and at least a part-time job here. If not two full-time jobs.

If the Muster family today wanted to build a house like the grandparents could back then, with only one salary and child benefit, they would have to manage with 1666€ + 385€ child benefit. That would be the average income compared to earlier, when only dad worked.

Ta-da ta-da ta-da... it's just sad!

EDIT: And capital income as well as rental savings through homeownership are also already included in these figures – so these are not pure earnings from work!

...and still, next week we will have another newcomer asking if they can handle financing over 400k€ with 3500€ net.

I still can’t get Elsa out of my head from 1-2 weeks ago. That was estimated 610k€ with 4700€ at 92% loan-to-value, and for her everything was rosy.

It's not that easy to extrapolate.
If child benefit is included, then parental allowance must also be included (which wasn't available in that extent before).
The singles group includes all career starters. At 20 you earn less than at 30.
Tax class 1 for singles, tax class 3 for married with one income.

Apart from that, 400k+ is not enough for home financing.


Who finances something like that? Well, if the borrower can sleep with it, fine, but the lender?

...and nevertheless next week we will have another newbie asking whether they can manage financing €400k with a net income of €3500.

I also can’t get Elsa out of my head from 1-2 weeks ago. That was an estimated €610k with €4700 at 92% loan-to-value, and for her, everything looked rosy.

You’re right, if you calculate the numbers completely objectively, you realize: it’s not enough.

But people have a feel for how salaries are distributed and sense that with €4700 for the family they are already well above average – and yet it still doesn’t work. For many, that is incomprehensible because they don’t want to see that they themselves aren’t better off just because others are worse off. Grandma and Grandpa managed it too...

It’s not just about the disproportionate price increases of recent years. It’s also about the insufficiently rising wages of the past decades. And as long as people are lulled into “we’re doing well,” not everyone wants to see the bitter truth behind the numbers when they come here with financing questions.

It's not that simple to extrapolate.
If child benefit is included, then parental allowance must also be included (which did not exist to that extent in the past).
The singles include all career starters. At 20 you earn less than at 30.
Tax class 1 for singles, tax class 3 for married with one income.

Aside from that, 400k+ is not enough for a home financing.


Who finances something like that? Well, if the borrower can sleep with it, fine, but the lender?

No idea who, but I think you were also commenting in that thread.

I don't trust the banks now that interest rates are going down and are probably slowly catching up to the September 2016 interest rate.

There is also no end in sight regarding interest rate policy.