there's been a housing bubble pop predicted for some time, often blamed in part on the favorable interest rates that facilitated ever-larger mortgages to finance the rising home prices.
ditto.
That's pretty much endemic in much of Europe, and a lot of it is down to speculation-driven investment.
I live in Vienna. There's a big construction going on a couple hundred meters down the road with appartments; its not some skyscraper, its a set of medium-density 6 or 7 floor appartment buildings arranged around a common park. The costs of units there are pretty well publicized, so last year I sat down on a lark and ran a couple numbers:
Suppose I have a money I want to invest, and I want to invest in appartments there to rent them out.
Model parameters:
* 30 year expected RoI, valued at constant 2021 Euros under an assumed average inflation rate 2.5%. (2022 says: lolzors)
* Corporate ownership, ie proceeds are taxed as capital gains (flat 27.5%) instead of as progressive income tax. That also puts us on the corporate deductions and depreciations schedule (as far as property goes *much* better for anything except your primary dwelling)
* Capital cost is zero (cash in hand)
* 10% of yearly income set aside for renovation and repairs
* 15% of yearly income set aside for running costs (lights, sewage, water, garbage, property management and all those things)
* 20% VAT
Once I plug in the purchase price into that I'd have to charge slightly more than 3k EUR for a 85sqm appartment. 3k, for 85sqm! And no, this isn't the city core or gentrification central; the entire district is mainly middle class.
The rental market for that doesn't exist, and *cannot* exist, because 90%+ of Austrians renters couldn't afford 3k rent, and the remainder would bloody well expect more than a standard, run-of-the-mill 85sqm appartment for that amount of money. And that's before we get to small, almost trivial problems like that the inflation rate isn't 2.5% anymore.
So the investment perspective of buy-to-let just does not work. The market's just not there, because the disposable income to pay for it isn't there. The *only* investment that makes sense is speculative: Hoping that you can unload the appartments to some other schmuck at a higher price is the only way to make those numbers work.
This comes into focus even more sharply that if I levelled down the rise in land purchase prices from their actual rate to official inflation rate my monthly figure becomes ... roughly 1.2k to 1.5k; that's still quite steep locally for those appartments here, but it is possible that at least some would be willing and able to pay that price.