Let's do some simple (and probably wrong, but hey) maths:

- House price: 450K euro

- In Europe you usually need around 30% of the house in cash (20% for down payment and 10% for paperwork and the like). This means you need 135K euro saved. Saving 18K euro/year => you need to save money for 7 years

- Now you get a mortage for the 70% of the 450K euro (315K euro). Now depending on how much you want to pay every month, we get different outcomes. Let's say you are willing to pay 1500 euro/month of mortage: this means (roughly) you will be paying your house for around 17 years

- This all implies you will be earning 60K euro (or more) per year over the next 24 years of your life. Let's say you are at this moment 25 years old, so you'll get your house paid when you are 50.

This is the panorama for people who are supposed to be the top 10% tier in the society (in terms of gross income) in a country like Germany (but applies to any other western European country as well). Not bad, but not good either.

> top 10% tier in the society (in terms of gross income)

According to this statistic[0], that should be 39.1% (numbers are for net income, but top two brackets should fit 60k gross income). In a household with two working people that both have semi-decent jobs you'll have that (and with tech job + basically any other job, you'll beat that).

> Let's say you are at this moment 25 years old, so you'll get your house paid when you are 50.

Yes, that sounds about right, and from what I can gather isn't too different from how it worked in my parents generation. What do you expect? That you can pay off a house in 10 years?

[0]: https://www.bpb.de/nachschlagen/zahlen-und-fakten/soziale-si...

my grandparents both were classical workers (so apprenticeship for men, nothing for women) and bought their houses, paid off 'til their 50ies (middle income bracket I guess). My parents were academics (probably upper third income bracket), paid off their house 'til their 50ies (my mother converted to housewife after buying the house!). Now, if I were to buy the house my parents live in, I'd have to pay around ~1.5M€ I guess. Not sure how I should do that (with a partner and kids) 'til 50, even being a tad higher in income than my parents.

That being said: after the war, housing was destroyed and had to be rebuilt, nowadays it's there already (and more than enough if I look at my family and others around us). The only problem is that now one doesn't need the lower third of incomes to build it and so it has become a playground for financialization games which basically make sure that wealth will steadily be reallocated one family with too many kids at a time...

Thats wrong. At least right now.

10% down payment is quite common currently in Germany for a house.

Well the money still needs to be paid at some point. If you go the 10% deposit route, you will get slightly worse interest rates and overall higher monthly payments. Payments that you need to maintain for ~20 years…

The 10% is what is currently often done because it barely moves the interest rates.

The interest rates are just so low that waiting to get a loan and buy a house is mostly money lost by not getting that stupidly low interest loan.

10% is the absolute minimum and doesn't buy you anything of the house, it just covers the legal and realtor fees.

That is mad. On a 500,000 EUR house, 50,000 EUR goes to realtors and lawyers?! What on earth are they doing for that kind of money? Is that including some large tax?

In the UK, you wouldn’t pay more than a few thousand for a lawyer and associated conveyancing fees, and the vendor pays the realtor (usually in the range of 0.5-1.5% I believe).

We do have stamp duty (tax) which can be substantial eg 15,000 on a 500,000 property.

I moved to Germany a few years back (was born and raised in the UK). When I saw the 4%+ just to the realtors... I was pretty shocked.

I swore to my wife that I'm not paying almost 20K to the person giving me a tour of a house.

Seems like selling houses might be a better job than software.

When I bought a 250K€ apartment in the Netherlands, my total cash outlay (down payment plus costs) was around 40K€. Anecdotal point supporting those pointing out that owning a 450K€ home in Europe is indeed still within reach for someone saving a modest amount each year.

In 5 years, that house might cost a bit more than 450k.

Or it might cost a bit less.

Well, assuming everything goes according to plan we are reaching the peak and housing will have to go down again. I don't know when this will happen, it could happen within 5 years, it could happen no earlier than 10 years.

Prices have beeen going up steadily for the last 10-15 years. Maybe there was a single dip in 2008-2010.

Past performance of an asset is no guarantee for future performance.

I don't care about past performance, I'm only looking at the future and unless there will be a future building boom in the cities to increase supply(spoiler alert, it won't because a million reasons) and unless there will be a sharp drop in internal and external immigration to the cities with jobs, prices will keep rising.

Have you exhausted all options for why prices will only increase?

I can see a scenario in which inflation rises and increased mortgage rates deflate the current overvalued housing market.

It's already rising in the US, if the central bank figures out how to meet the 2% goal year over year it will raise the interest rates in a few years. Probably not before 2024 though.

Especially when the populational trends imply that demand for housing will go down on the distant future. Future performance is almost guaranteed to decouple from past performance at some point.

Your points are technically correct, the best kind of correct.

I'm not looking at any undetermined future point in time, if I'm ranting about housing prices it might be not unrealistic that I'd like to buy one in the next few years - and I've seen absolutely zero indication that the prices would suddenly drop by 20-40% to the point where I'd call them reasonable, like 15 years ago.

This chart should be far more prominent than it is in most discussions about housing in Germany:

https://www.interhyp.de/ratgeber/was-muss-ich-wissen/zinsen/...

The incredible increase in house prices tracks a dramatic decline in interest rates. Interest rates were at 1% last year, below inflation! I have no idea how interest rates will change in the next few years, but I do know they will not decline at the same rate as over the past 10 years. As soon as they go up, the prices will decline.

Huh?

Things will be different on the far future. The exact point when it will change is a matter of speculation, and all the warnings about timing the market apply. You implied a high certainty that nothing will change, ever, and talked about 15 years things.

There is a high likelihood that nothing will change in 5 years (even though COVID19 reduces those odds a lot, because a bunch of people just died). And there is very high likelihood that things will change a lot in 40 years. Time things at your own risk.

not everywhere. and there's some evidence that big corps are buying up houses and becoming mega-rentiers. always a chance these companies could collapse and then the market would be flooded with houses as they liquidate.