We have now decided to start building a house from autumn 2019, even though personally I would have much preferred to buy. On one hand, I’m happy that our long-held plans are finally coming to fruition; on the other hand, I’m currently frustrated that we spent 5 years searching in vain – 5 years of rent payments at 600 euros per month (about $650 USD) times 12 months times 5 years equals 36,000 euros (about $39,000 USD)… money we could have already paid toward a mortgage.
My parents had their mortgage paid off by age 50. According to our repayment plan, I expect to be in my early 60s when we finish.
We posted several ads, told everyone we know, left notes in mailboxes of vacant properties, and kept our eyes open everywhere… all ultimately futile. We could have bought something in November 2017 but were outbid at the last moment by about 10,000 euros (around $11,000 USD). That was not worth it to us, especially since the agent was also asking for a commission. That’s life…
One real estate agent told us that interesting properties sometimes have to be marked inactive within an hour after listing because the phone won’t stop ringing otherwise.
About 95% of the viewings we did turned out to be disappointments: mold, water damage, kilos of pigeon droppings in the attic, awkward floor plans, very old electrical installations, filthy bathrooms, no mobile reception, slow internet, impending road and sewer construction of 1.5 years duration with cost repartition, paint shops, and noisy neighbors like arcades, and so on.
Supposedly, half villages are empty here in northern Hesse and many houses are waiting for buyers. But I really don’t see that, except for some dilapidated half-timbered houses on main roads.
This year, our patience ran out because I don’t believe anything will change in the next 5 years either.
How long did it take for you? Or did you skip the “fun” and decide to build right away? I’d be glad to read about your experiences.
Have a great weekend!
My parents had their mortgage paid off by age 50. According to our repayment plan, I expect to be in my early 60s when we finish.
We posted several ads, told everyone we know, left notes in mailboxes of vacant properties, and kept our eyes open everywhere… all ultimately futile. We could have bought something in November 2017 but were outbid at the last moment by about 10,000 euros (around $11,000 USD). That was not worth it to us, especially since the agent was also asking for a commission. That’s life…
One real estate agent told us that interesting properties sometimes have to be marked inactive within an hour after listing because the phone won’t stop ringing otherwise.
About 95% of the viewings we did turned out to be disappointments: mold, water damage, kilos of pigeon droppings in the attic, awkward floor plans, very old electrical installations, filthy bathrooms, no mobile reception, slow internet, impending road and sewer construction of 1.5 years duration with cost repartition, paint shops, and noisy neighbors like arcades, and so on.
Supposedly, half villages are empty here in northern Hesse and many houses are waiting for buyers. But I really don’t see that, except for some dilapidated half-timbered houses on main roads.
This year, our patience ran out because I don’t believe anything will change in the next 5 years either.
How long did it take for you? Or did you skip the “fun” and decide to build right away? I’d be glad to read about your experiences.
Have a great weekend!
It’s not just about the interest rates. No one really knows what will happen. The discussion is actually pointless. Whatever will be, will be, and during the fixed interest period, nothing changes anyway.
The real question is how the upcoming generational change will unfold. In my parents’ residential street, for example, almost everyone is over 60. Will these people actually invest tens of thousands of euros in heating, insulation, windows, barrier-free renovations, etc., or will they put their houses on the market beforehand? Do they still want to spend hours on gardening and heating 150 m (490 ft) for two people? Their children have long since moved away, settled in and around Frankfurt, Hanover, Cologne, etc., and will not be taking over the houses. This affects far more households than those who, even in the best economic conditions, can no longer pay their mortgage installments and therefore have to sell.
I consider this development as a price breaker more relevant than unrealistic interest rate jumps of 3-4 percent within a short time.
The real question is how the upcoming generational change will unfold. In my parents’ residential street, for example, almost everyone is over 60. Will these people actually invest tens of thousands of euros in heating, insulation, windows, barrier-free renovations, etc., or will they put their houses on the market beforehand? Do they still want to spend hours on gardening and heating 150 m (490 ft) for two people? Their children have long since moved away, settled in and around Frankfurt, Hanover, Cologne, etc., and will not be taking over the houses. This affects far more households than those who, even in the best economic conditions, can no longer pay their mortgage installments and therefore have to sell.
I consider this development as a price breaker more relevant than unrealistic interest rate jumps of 3-4 percent within a short time.
M
Mottenhausen4 Dec 2018 15:34Jean-Marc schrieb:
The question is more about how the upcoming generational transition will take place. For example, almost everyone living on my parents’ residential street is over 60.There is no abrupt generational shift: people are born every year, people turn 60 every year, and people also pass away every year. I don’t believe there were specific building “generations” whose houses will suddenly all become available at once. In my opinion, the rate of new single-family home construction hasn’t varied that much. So, while you’re waiting for the retirees on your street, there are already enough older retirees moving out of their houses, and the market absorbs them like a vacuum cleaner sucks up cookie crumbs. (meaning the houses..., not the retirees)
My dream for a very long time was to build my own house. I grew up in a rented apartment and always admired friends at school who lived in houses with gardens.
My wife (who was still my girlfriend at the time) knew about this dream. But at first, we moved into a shared apartment because, due to my studies, she was the sole earner. With her starting salary, my part-time job, and support from my parents, we managed well. After I finished my studies, we moved to a bigger apartment.
At some point, I started getting interested in the idea of building a house and kept bringing it up, which annoyed my girlfriend. We agreed to postpone the topic until after the wedding. However, she was more inclined to buy than to build.
We got married in spring 2016. After the honeymoon, we looked at a few existing properties and plots of land. She was still leaning towards buying instead of building, as she found building too uncertain.
After I convinced her to visit a model home park, she quickly grew fond of the idea of building “our own” four walls. Then things moved quite fast: alongside visits to various model home parks and discussions during summer 2016, we found a building plot with a positive preliminary building permit in a smaller town in the outskirts of Hamburg (suburban development).
The final decision to hire a local building contractor was made by mid-August. Earthworks started at the end of January, the topping-out ceremony took place in early March, and the house handover was mid-July. We moved in at the end of August, and our son was born in early October.
Now we have been living in the house for over a year and don’t regret any of our decisions. We would do it all exactly the same way again.
My wife (who was still my girlfriend at the time) knew about this dream. But at first, we moved into a shared apartment because, due to my studies, she was the sole earner. With her starting salary, my part-time job, and support from my parents, we managed well. After I finished my studies, we moved to a bigger apartment.
At some point, I started getting interested in the idea of building a house and kept bringing it up, which annoyed my girlfriend. We agreed to postpone the topic until after the wedding. However, she was more inclined to buy than to build.
We got married in spring 2016. After the honeymoon, we looked at a few existing properties and plots of land. She was still leaning towards buying instead of building, as she found building too uncertain.
After I convinced her to visit a model home park, she quickly grew fond of the idea of building “our own” four walls. Then things moved quite fast: alongside visits to various model home parks and discussions during summer 2016, we found a building plot with a positive preliminary building permit in a smaller town in the outskirts of Hamburg (suburban development).
The final decision to hire a local building contractor was made by mid-August. Earthworks started at the end of January, the topping-out ceremony took place in early March, and the house handover was mid-July. We moved in at the end of August, and our son was born in early October.
Now we have been living in the house for over a year and don’t regret any of our decisions. We would do it all exactly the same way again.
First of all, it must be said that the boom is driven by strong demand—partly due to low interest rates—combined with limited supply. This is not a speculative bubble but genuine demand. Significant price drops would only occur with a substantial increase in supply and a sharp decline in demand.
If interest rates rise (I am thinking more in the range of 2 to 4%), I would expect demand to decrease slightly. In that case, I would anticipate price stagnation over several years. Inflation would then gradually raise prices back to a more manageable level over time.
This saturation is already occurring in some areas here in BY. Not everything sells at any price anymore. However, I only see notable stronger losses (-10 to 25%) in certain locations.
If interest rates rise (I am thinking more in the range of 2 to 4%), I would expect demand to decrease slightly. In that case, I would anticipate price stagnation over several years. Inflation would then gradually raise prices back to a more manageable level over time.
This saturation is already occurring in some areas here in BY. Not everything sells at any price anymore. However, I only see notable stronger losses (-10 to 25%) in certain locations.
Mottenhausen schrieb:
I don't think there were any particular building generations whose houses are all becoming available at once. Actually, there were. In the 1960s, the vast majority of single-family home builders were young families with children, and there were fewer late childbearers, so this building generation shows less age spread. I have such a residential area nearby that was developed within a few years back then. Several groups of confirmation-year cohorts ended up clustered in a row of houses, and they have essentially all retired at the same time. Two major employers in the region have drastically reduced their workforce, so the younger generation isn’t moving in. If you own a home care service around here, you know where houses are going to be available cheaply soon.
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