ᐅ No building plot available due to new EU local residency model?
Created on: 11 Nov 2017 21:49
H
HanneshickelH
Hanneshickel11 Nov 2017 21:49Hello everyone,
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
Well, what advice can really be given to you here?
You earn significantly above average. This means you fall outside the programs designed to help people become homeowners even if they don’t earn above average. You are operating within the system of supply and demand.
I would recommend setting a higher savings rate than €15,000 (about $16,000) per year when your net income is €6,500 (about $7,000). Doubling that should be achievable. Then you could manage it within 2-3 years.
A target payment of €1,800 (about $1,900) with a net income of €6,500 (about $7,000) is quite comfortable.
Have a look at your expenses.
You earn significantly above average. This means you fall outside the programs designed to help people become homeowners even if they don’t earn above average. You are operating within the system of supply and demand.
I would recommend setting a higher savings rate than €15,000 (about $16,000) per year when your net income is €6,500 (about $7,000). Doubling that should be achievable. Then you could manage it within 2-3 years.
A target payment of €1,800 (about $1,900) with a net income of €6,500 (about $7,000) is quite comfortable.
Have a look at your expenses.
H
Hanneshickel11 Nov 2017 23:31The reason we don’t have more equity yet is that we spent many years in training for this salary, and we also paid a lot for it.
In my circle of acquaintances, no one had saved more than €30,000 (approximately $33,000) for their house financing. We already thought we had saved a lot.
And yes, $1,800 would be very comfortable if there were two full salaries. But if one income is lost for an extended period due to a child and only half remains, the situation looks quite different.
OK, so we’ll probably save for a few more years until we can afford a house in our area. Or we might be lucky and find a nice used one.
I just find it strange that families with little money and low income are basically being encouraged to build, even though the risk is quite high if interest rates rise...
And people who could afford it without risk have to compete on the open market with the newly wealthy and heirs for the few available plots.
You could say you are being penalized for saving and for having a good job after spending a long time in school and university...
Maybe someone can still give me tips on where to look for building land or who to talk to.
In my circle of acquaintances, no one had saved more than €30,000 (approximately $33,000) for their house financing. We already thought we had saved a lot.
And yes, $1,800 would be very comfortable if there were two full salaries. But if one income is lost for an extended period due to a child and only half remains, the situation looks quite different.
OK, so we’ll probably save for a few more years until we can afford a house in our area. Or we might be lucky and find a nice used one.
I just find it strange that families with little money and low income are basically being encouraged to build, even though the risk is quite high if interest rates rise...
And people who could afford it without risk have to compete on the open market with the newly wealthy and heirs for the few available plots.
You could say you are being penalized for saving and for having a good job after spending a long time in school and university...
Maybe someone can still give me tips on where to look for building land or who to talk to.
Hanneshickel schrieb:
We are a family of two.No, you’re not. See the definition of family: “parents and their child(ren).”
Hanneshickel schrieb:
What other options do we have to get affordable building land?Hanneshickel schrieb:
We don’t have enough points because we don’t have children.Hmm... does anyone else notice something here?
A radical idea: maybe you could move somewhere where “normal” people (and sorry, but with that income I don’t think you still count as that) can afford a house. What’s happening in the Munich area nowadays is just crazy.
T
toxicmolotof11 Nov 2017 23:35Having children. At least one, preferably two. This reduces your income (at least temporarily) and probably increases your points.
Otherwise, I agree with the previous commenters. These point systems are relatively balanced and fair. We can see that here with daycare spots.
Otherwise, I agree with the previous commenters. These point systems are relatively balanced and fair. We can see that here with daycare spots.