Cities are hard because it's kind of a function of services and space constraints. If there's only so many square meters within 15 minutes of public transit, for example, that's gonna spike prices--as long as public transit is desired. You can look at Los Angeles for a different set of rules--super sprawl, heavy prevalence of cars and traffic, various environmental/cultural concerns, etc. City planners know all this and the zeitgeist now is the 15 minute city (or whatever number of minutes) to try and reduce these inefficiencies of scale and become less car-obsessed.
But all that aside, I'm not really talking about housing prices. I'm talking about the boom and bust cycles.
A house. Let us say 160 sqm with 800 sqm garden. You can buy such property very cheaply somewhere in rural Thüringen, but for Munich, you would have to be a millionaire or close to that status.
You don't <<need>> a 160sqm house with a 800sqm garden to raise kids :-)))
You <<want>> that house, notice the difference?
I grew up in a very practically designed 2 bed room apartment of about 90sqm. It was more than adequate and to preempt comments, it wasn't "inhumane" or a "slum" or whatever. I'd live there today if Romania as a whole wouldn't have a lot of growing up to do.
A 100sqm apartment, made larger to account for modern sensibilities, is more than enough to raise 2 kids.
The "need" level is very basic, in principle you need just some water and any food and any shelter and people lived like that for millions of years.
Even a Romanian block of flats from the Ceausescu period would seem a luxury to the peasants of Vlad the Impaler.
But we are talking about Germany, Munich. This is one of the most advanced economies in the world, and a great power of export. Having a 160sqm house with a 800sqm garden shouldn't be out of reach of a regular engineer working there. Plenty of people were able to buy similar properties just 30-40 years ago, in Munich, Prague or Copenhagen. Something is seriously askew if a normal middle class in a rich country can no longer do that.
There's almost no popular city in the world where this is feasible.
Especially the 800sqm garden.
A small terraced house with a 200sqm garden, maybe. But 800sqm is extreme for anything above a sleepy town. Maybe in a bad neighborhood or a suburb reasonably far away from the actual city.
But in the city? In ~1000sqm you could build an entire apartment building that could house 60+ people.
> Something is seriously askew if a normal middle class in a rich country can no longer do that.
No, it's a correction the other way. The post war boom that lasted until about 1995 is over for good. Especially with the competition from all over the world, not just from the small Western sphere.
Edit:
Oh, and this is super arrogant:
> Even a Romanian block of flats from the Ceausescu period would seem a luxury to the peasants of Vlad the Impaler.
If you sneer at Communist apartment buildings, a decent Romanian block of flats built in 2022 is basically at Western standards from every aspect you can imagine (example: https://www.skia.ro/en/one-cotroceni-park/). And I stand by my point that you can raise a perfectly happy and functional family with 2 kids in a 100sqm apartment. If anything, that house with a large yard is more of a luxury.
Arrogant? I grew up in a Czechoslovak apartment building and although it still stands and now looks a lot better inside and outside, it required a lot of investments in the meantime and it might have been cheaper to pull it down and build a replacement from scratch - but it wouldn't have been bureaucratically easier, plus people are attached to their dwellings.
Meanwhile buildings built around 1900 are in better order, because the quality of work was a bit higher back then.
You can raise a decent family in a flat, but things like a constantly leaking roof, gaps between windows and windowsills big enough for snow to get through or flimsy electricity installations made in alluminium (one of my friends back in the basic school got half-electrocuted by a faulty socket, result of a shoddy work of a drunken state-employed electrician) are pretty miserable, and that was the building standard for blocks of flats east of the Iron Curtain prior to 1989. I still remember my mom stuffing rags into said gaps around the windows to stave off the draft. This wasn't a Western standard.
Now, after a lot of improvements and investments, it is, yes.
As for the 800 sqm garden, yeah, not in the city center, but if you consider 30 minutes by public transport far enough, it used to be well possible. Parents of a friend of mine are a cook and an accountant, now both retired. They built such a house in Prague-Ďáblice in the 1970s, in a walking distance from a tram terminal. A well paid Google engineer might probably be able to buy this property now on a mortgage. This is just one anecdote of many in my surroundings.
But all that aside, I'm not really talking about housing prices. I'm talking about the boom and bust cycles.