ᐅ No building plot available due to new EU local residency model?
Created on: 11 Nov 2017 21:49
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Hanneshickel
Hello 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
B
Bieber081513 Nov 2017 21:57Rich is the one who doesn’t have to work. Now you know.
What a mess, I still have to respond to you despite my intention not to – but first, this is meant to be balanced.
Okay, that really didn’t come across that way to me, just like this one:
… because I read from "What is criticized here, if at all, is your proposed savings rate." something like "What is (rightfully) criticized here, if at all…" So I offer a sincere apology if I was unfair to you on that point.
Okay, if that’s what you understood from "And people who could afford it without risk have to compete on the open market with all the nouveau riche and heirs for the few plots of land." that’s understandable. For example, I read an exclusion from the "have to compete together with all the nouveau riche and heirs" part because otherwise he’d have to be nouveau riche and an heir himself. I would have understood that part like you if it had said "have to compete together with all the (other) nouveau riche and heirs" But anyway, these are subtleties that don’t really matter, since we obviously understood this completely differently and thus misunderstood each other. I’m happy to just file that under “can happen”… agreed?
I can understand your conclusion from the quoted wording, even though I don’t share it. I did not perceive the OP as a whining victim, but rather as very dissatisfied and disappointed about the deadlocked situation. Maybe I see it that way because I have been in a similar situation myself—and just got lucky with my plot and was also close to despair...
I haven’t crossed that bridge yet, but I don’t have to. In my view, that conclusion is too narrow, because they actually cannot do that since the "nouveau riche" (to whom they do not belong) have much more money and therefore drive up price per square meter to levels that even academics struggle with. But we can still have a few differing opinions.
Yes, that’s true. I’m originally from the north, so I know quite a few people from my old circle of friends and family who are building or have built. It’s much tighter in the south. As I said, I spent four years searching and, with a lot of luck, got a rather small plot. Meanwhile, my sister was building in Salzhausen near Hamburg. No plot under 800cm² (8600 square feet) in the new development area, and no purchase price under 100k (for the price I paid here, I could have barely got the driveway, so to speak)…
ypg schrieb:
If my post comes across to you as strange or arrogant, I can understand that. However, I quoted the OP and deliberately used their words in my post.
Okay, that really didn’t come across that way to me, just like this one:
ypg schrieb:
I don’t have a personal standard for savings rates. I simply summarized what previous posters generally criticized.
… because I read from "What is criticized here, if at all, is your proposed savings rate." something like "What is (rightfully) criticized here, if at all…" So I offer a sincere apology if I was unfair to you on that point.
ypg schrieb:
Yep! The whole thing is based on what the OP wrote. Here, I highlighted the part my words are based on. It is not my usual way of speaking to refer to nouveau riche.
Okay, if that’s what you understood from "And people who could afford it without risk have to compete on the open market with all the nouveau riche and heirs for the few plots of land." that’s understandable. For example, I read an exclusion from the "have to compete together with all the nouveau riche and heirs" part because otherwise he’d have to be nouveau riche and an heir himself. I would have understood that part like you if it had said "have to compete together with all the (other) nouveau riche and heirs" But anyway, these are subtleties that don’t really matter, since we obviously understood this completely differently and thus misunderstood each other. I’m happy to just file that under “can happen”… agreed?
ypg schrieb:
Therefore, I stand by my opinion that the OP sees themselves as a victim; they speak of punishment and feel treated unfairly,
I can understand your conclusion from the quoted wording, even though I don’t share it. I did not perceive the OP as a whining victim, but rather as very dissatisfied and disappointed about the deadlocked situation. Maybe I see it that way because I have been in a similar situation myself—and just got lucky with my plot and was also close to despair...
ypg schrieb:
even though they are obviously in a situation that would allow them to get a plot without subsidies like this local resident scheme.
I haven’t crossed that bridge yet, but I don’t have to. In my view, that conclusion is too narrow, because they actually cannot do that since the "nouveau riche" (to whom they do not belong) have much more money and therefore drive up price per square meter to levels that even academics struggle with. But we can still have a few differing opinions.
ypg schrieb:
Apparently, things run differently in and around Munich compared to the north – there are always some plots available for sale here...
Yes, that’s true. I’m originally from the north, so I know quite a few people from my old circle of friends and family who are building or have built. It’s much tighter in the south. As I said, I spent four years searching and, with a lot of luck, got a rather small plot. Meanwhile, my sister was building in Salzhausen near Hamburg. No plot under 800cm² (8600 square feet) in the new development area, and no purchase price under 100k (for the price I paid here, I could have barely got the driveway, so to speak)…
Müllerin schrieb:
And Ruppsn, we all noticed that you don’t like Ypg, that’s enough, right? Well, then you have misunderstood something. I don’t actually have a problem with Yvonne; I just found some statements (obviously misunderstood) unacceptable, and I addressed them in a similarly direct manner, which she also uses quite often. What I appreciate about her is that she at least tries to understand the other point of view, something that not many people here in the forum manage, which makes it all the more valuable to me.
Müllerin schrieb:
But the criticism of the savings rate is realistic. I see it differently, because I don’t presume to criticize someone I don’t know and whose life circumstances I cannot judge. Regardless, I have no motivation or reason to feel compelled to criticize him. He certainly doesn’t provide one by describing his difficult situation and sharing information about his financial situation for the sake of context. I didn’t notice him complaining that he earns too little money. But you seem to see it differently… well, whatever.
Regarding the saving rate: ypg is right. Given the salary, it is actually too low. From my impression, ypg didn’t criticize that it was “weak” so far, but made it clear that it would be good to increase it significantly in order to build up more equity and have more flexibility in decision-making.
But it doesn’t really matter. I believe the original poster has more or less received the advice they were looking for.
But it doesn’t really matter. I believe the original poster has more or less received the advice they were looking for.
H
HilfeHilfe14 Nov 2017 07:33I don’t understand the stress either. You’re paying 650 € (about $700) rent without utilities for a large 120 sqm (1300 sq ft) apartment. If necessary, three or even four people could live there.
I think you’re putting pressure on yourselves. It’s probably also because of acquaintances who all own property.
At our bank, people already get strange looks if they don’t own their own home. When I see all those risky 650,000 € (about $700,000) mortgages, it makes me feel uneasy.
We also have only 120 sqm (1300 sq ft), with 105 sqm (1130 sq ft) of actual living space, and four of us live comfortably in it, all at a reasonable cost (only 200,000 € (about $215,000) left on the mortgage for a new build). The 105 sqm (1130 sq ft) size is often underestimated.
It’s the pressure from others that causes the stress. People just want to be “mainstream.”
I think you’re putting pressure on yourselves. It’s probably also because of acquaintances who all own property.
At our bank, people already get strange looks if they don’t own their own home. When I see all those risky 650,000 € (about $700,000) mortgages, it makes me feel uneasy.
We also have only 120 sqm (1300 sq ft), with 105 sqm (1130 sq ft) of actual living space, and four of us live comfortably in it, all at a reasonable cost (only 200,000 € (about $215,000) left on the mortgage for a new build). The 105 sqm (1130 sq ft) size is often underestimated.
It’s the pressure from others that causes the stress. People just want to be “mainstream.”