I will say that even if Bayern Munich have all their first eleven players on the field and all their substitutes fit, there is nothing that they will play to win Real Madrid. This is because Real Madrid is stronger than them currently, and Real Madrid have the attacking force it takes to destroy any club defense.
In theory, Real Madrid is stronger and Bayern Munich has no chance to win the match. But we must understand that Bayern Munich is actually a big team, too. They have quality players, they have experienced coach. It is surely not impossible that Bayern Munich can surprise Real Madrid. I think Real Madrid can't underestimate Bayern Munich. They have proven that they could eliminate Arsenal although Arsenal looked better than Bayern Munich. This may happen again if Real Madrid too underestimates Bayern Munich.
Real Madrid does not have home or away, as they can win anywhere that they are playing the game. Another thing is that whatever made Real Madrid to reach the semifinals Bayern is a small challenge for them to get rid of.
Real Madrid players always have winning mentality. It is pretty true that they can win in a home or a way match. However, a home match should have a better advantage because a team must feel more comfortable playing at home.
Frankly, when Manchester City-Real Madrid had the qualifying round, I believed that the one who passed this round would be the champion.
I think most of us think the same as you. Man City and Real Madrid are the favorite candidates. They have stronger squads, they have smart coaches. They actually are expected playing in the final round. Unfortunately, they must face one another in the quarter-final. Since Man City is eliminated, Real Madrid is the only favorite candidate for the champion.