After a real-estate investment there are nominally more euros available than at the start. Whether more can actually be bought with them is a separate question. For that, the period and the chosen price measure must be explicitly specified. a general price index and the price of your next specific house are not automatically the same.
Choose a reference measure
This example uses an artificial basket of goods as the calculation measure. It contains no current inflation values and makes no claim about Austrian or German house prices. Taxes, further payments and withdrawals are already excluded in the model; initial and final amounts are defined comparably.
At the beginning the capital amounts to 100.000 euros. After the period under consideration it is 110.000 euros. The nominal increase is 10,000 euros or ten per cent. In the same period the chosen fictitious basket of goods rises in price from 100 to 112 units, that is by twelve per cent.
Express the same purchasing power as the final amount
To be able at the end to pay for the same quantity of the basket as at the beginning, 112.000 euros would be needed in the model. In reality only 110.000 euros are available. Compared with this requirement 2,000 euros are missing.
Expressed in initial purchasing power the 110.000 euros now correspond to 110.000 divided by 1,12 = around 98.214,29 euros. Relative to the initial 100.000 euros this is a real change of around minus 1,79 per cent. The calculation is 1,10 divided by 1,12 minus 1.
The rough difference ten minus twelve equals minus two percentage points is not exactly the same ratio calculation. For the test described here the full formula is therefore used.
Separate consideration of personal real-estate needs
If your actual goal is a specific share of housing, you need the amount of money that will be required for that in future or several justified variants. The basket model does not prove that exactly this apartment would have become twelve per cent more expensive or will become so in future. Even a general house price index would not yet be an assessment of the specific property.
Use the correct label for the result
Keep nominal final balance, chosen price measure and real comparison figure side by side. For differing periods the time bases must first be standardised. With additional payments a simple start-to-end ratio may no longer be appropriate.
The purchasing-power calculation can thus correctly classify a nominal increase. It does not assess a real investment and does not prescribe a reliable protection strategy against inflation. For the next property purchase it remains decisive which concrete amount will then be available and actually required.