One Flat Is Still a Portfolio Decision

The flat does not stand alone. It joins a household balance sheet whose largest asset is already something else: two software-engineering salaries in the Bonn–Cologne region.

Look at what actually correlates. A serious downturn in German tech employment hits, simultaneously: (a) both incomes, (b) local rental demand, (c) local prices, (d) your ability to service €878/month, and (e) your ability to sell – because the buyers are people like you. That is not diversification; it is a leveraged doubling-down on one regional labour market. Jordà et al. show housing returns are weakly correlated across countries – which says nothing about the correlation between your flat and your payslip, which is high.

Three numbers should govern sizing.

1. Judge concentration by gross exposure, not equity. You commit €29,500 and control €178,000 – 6× gross leverage on one indivisible asset in one postcode. €178,000 is the number that behaves like risk.

2. The reserve is not the deposit, and it is not optional. Before completion you need, in addition to the €29,500: twelve months of full annuity (€10,600), one plausible Sonderumlage (€5,000), and your ordinary household emergency fund. If €30,000 is all the cash you have, the honest answer is that this deal is too big – and the fix is to wait two years, not to buy a cheaper flat with the same zero reserve. This is the most common way a first purchase goes wrong, and it has nothing to do with the flat.

3. Run the survivability test before signing. One of you out of work nine months; the flat vacant four months; the WEG resolves a €6,000 levy. Hole ≈ €2,400 of rent + €6,000 + nine months of one salary. Can you pay every instalment without selling? If not, the position is mis-sized, and no adjustment to the rent forecast repairs that.

Liquidity. A German residential sale takes 3–6 months in a normal market and much longer in a bad one, at ~4% cost. You cannot sell 20% of a flat, and you cannot rebalance. This asset does not respond to a change of mind, including a change of city.

How a couple should size a first purchase. Set the ceiling from the stress case, not the base case: the maximum monthly after-tax burn you could carry on one salary, at +1pp on the refinancing rate, with two months of vacancy a year. Whatever price that supports is your budget – then buy slightly smaller. The first unit's job is to teach you the business without threatening the household.