Even if it's half cheaper, a family house of 80-100m^2 costs beyond 600K which is way beyond affordability range of a couple both working as software engineers let alone people with non-tech jobs.
With mortgages in the 1.5-2% range, a 600K house would cost you €750 - €1000 a month in mortgage payments, and that's not even taking into account tax benefits you may get. That's an absolute steal compared to what you would pay in rent in a place like Amsterdam or London.
Why is that? Like, on the US west coast, ballooning home prices makes sense because their cities are in valleys with a fixed amount of land, but munich looks like it has a bunch of farmland around it that could be converted into housing increasing supply and thus decreasing prices. This coming from someone in chicagoland which has 9.5 million people but housing isn't crazy because the metro area sprawls 30-40 miles out into what used to farmland.
Because Germany is mostly old money, inherited for generations, that is very risk adverse so instead of investing it in new SW companies or buying stocks, they park it in real estate in desirable areas and prop up this bubble since it's a sure bet for a return on investment. That's why they call it Beton Gold ("concrete gold").
Munich has very strict limits on vertical height so that cathedral spires aren't drowned out by the buildings. On the edge of the city you do see some taller office buildings but not in the core, and certainly not to the extent you would expect in a major city.
Low interest rates certainly allow you to afford a more expensive home, but inflation adjusted price per square foot isn't actually skyrocketing for most of the US outside of the west coast [0]. For example, Dallas/Fort worth and Houston metro populations, the 4th and 5th largest in the US have both grown a whopping 19% in the past decade and prices aren't skyrocketing there. But they have plenty of land surrounding their cities that can be developed to increase the housing supply.
It just seems weird to me. Why are people paying such high prices when there is farmland so close by that you could buy and use to build some condominiums, townhomes, duplexes or even single family homes.