[confidantlake]

I think the housing crises has caused a lot of it. I am trying to have kids in my mid 30s, in large part because it took that long until I was financially stable. I can't even imagine what it must be like for a non software engineer.

Maybe a lower population -> lower housing prices -> easier to start a family will cause some sort of equilibrium.

[ChuckNorris89]

>Maybe a lower population -> lower housing prices

That's not how real estate pricing works in the real world capitalism. Germany's population has been on decline for ~30 years due to demographics, yet housing has been getting more and more expensive, far outpacing wage growth in the last few decades, especially after the QE bull run from ~2013, so much so that owning your home is impossible for the average German.

Why is that you wonder? That's not how free market economy should work right? If now there is less demand for a good due to population shrinkage, then prices should come down right?

Well, that's because housing is not a good, it's a speculative investment asset, so as soon as people die and are not replaced, their free houses don't magically end up in the hands of those who would need them the most to buy at a discount, but end up on the "free market" being bough by existing rich home owners, investors, speculators and publicly listed real-estate conglomerates, using their existing assets and capital as leverage to buy even more houses for their investment portfolio. And governments and banks have ensure the policies to make sure this asset keeps going up, up, up.

When housing is an investment vehicle, then it can never be affordable, regardless of the population decline.

Like a commenter above said, which explains why home prices are not coming down despite population shrinkage: "people are not competing for houses, piles of money are. The bigger piles are winning."

[iggldiggl]

> Germany's population has been on decline for ~30 years due to demographics

The thing is – within that time frame it hasn't, actually. There have been some years with slight decreases, but those have been balanced by other years with increases, and compared to 1990 population is actually definitively slightly up (83.2 millions last year vs. 79.8 millions). Combined with a decreasing average household size (2.27 in 1991 vs 1.99 in 2019) and internal migration those things by themselves will probably generate enough pressure on the housing markets in and around the prospering parts of the country, even without any added financial shenanigans on top.

[ngc248]

As you rightly say real estate is treated more as an investment, so those who have bought in will never sell for a price lesser than what they bought in for. Hence real estate prices will never crash, unless something disastrous or apocalyptic happens to that country/area.