ᐅ Stay here (and build) or move away (and build/buy elsewhere)

Hello everyone,

I don’t even know where to begin. There is an older thread, but since links are considered taboo, you’ll have to search for it yourselves if you’re interested. In short, since 2018!!! we have been aware of two new residential development areas in our town, with plots allocated based on a scoring system. And as it stands, we are currently ranked 52-55 (four others have the same score and would then be drawn by lot on the allocation day) out of a maximum of 59. I don’t want to blame the municipality here for leaving four years to pass without reason, ignoring two official land value assessments amid an exploding price level, and so on. Then came Corona, now “Crazy Ivan,” no more KfW funding, skyrocketing construction costs for prefab houses, rising interest rates, and generally increasing prices. In short… it’s totally insane to build now! But... who says it won’t be even worse in three years?

Additionally, we simply want to move to a bigger place (second child), and rental apartments in the Munich suburbs are outrageously expensive. For retirement, we want to have a certain amount of value as assets.

In general, about €30,000 (approximately $32,000) would come as a gift from our families, about €60,000 (around $64,000) as an interest-free loan from various wealthy Swiss relatives, and €10,000 (around $10,700) from us as equity. We already have a financial advisor who calculated everything, and a mortgage would be possible with a monthly payment of €1,770 (around $1,880). Everything would be tight, though: gym membership canceled, no spontaneous dining out, no spontaneous activities... best if I cook lunch at home.

So… soon (unless someone files another lawsuit) the plots will be allocated. By then, we need to decide if we want to stay here in the familiar neighborhood (with all its advantages, like close proximity to the in-laws) and manage the estimated €750,000 to €850,000 (about $800,000 to $900,000)—€350,000 ($375,000) for the land and the rest for the house—without getting overwhelmed. (Net income is about €4,400 ($4,670), with €2,700 ($2,865) fixed expenses and living costs.) Alternatively, we have considered moving away from Bavaria. The Upper Franconian provinces near the Czech border are significantly cheaper for used properties, ranging roughly from €200,000 to €500,000 ($215,000 to $530,000), and we would have a lot more room and money for living there.

We have already crossed out the plots that are definitely not an option for us. Oh, and half of them are for sale, the others are assigned as leases with all their possibilities but also many problems!

It’s a painful, nagging question whether it’s better to stay here and hope for an increase in value (plus living close to the parents), make use of leasehold rights and slowly lose value, or move somewhere else entirely where prices are reportedly much lower according to Immo24. Also, my wife is assuming the current situation will continue, while I am hoping to finally get a better paying job within the next one to two years.

Clearly, we don’t want to leave, but the price level is just so insane that we have to ask ourselves if it’s really worth it anymore. This whole situation just causes headaches, with the feeling that we have to choose between bad and worse.

Move away and be happy.

1. Your budget is not enough for building anyway. In Bavaria, 400,000 (about 400k) is enough for 100 sqm (1,076 sq ft) plus additional costs.
2. The rate of an insufficient budget is too high for you.
3. If you have to give up everything for the house, it doesn't help anyone.

Hello,

just briefly:
With a budget of 750k – 350k for the land, you’re assuming a house price of 400k. I find that absolutely impossible in Munich.
A total of 850k is already more realistic.
But then you would have an incredible 810k debt with a net income of 4400€ (about $4,800).
That can only be considered crazy.
Even with great salary increases, this will remain problematic for a very long time.

And the second point: You have known about the development area since 2018 (if I remember correctly, it’s in the northern Munich area?), yet you only have 10k equity.
That clearly shows there is very little financial flexibility.
On top of that, there is your “older” age.

Overall, I don’t see you owning property in the Munich area. Even a leasehold plot will be too expensive for you.
Why not consider an older condominium close to your families?

These figures are a bit too high for you. The income absolutely does not match the budget at all.

Hausbautraum20 schrieb:

And the second point: You have known about the development area since 2018 (if I remember correctly, it’s in the northern Munich area?), yet you only have $10,000 (10k) in equity.
That already shows there is very little room for maneuver.
On top of that comes your “older” age.

Honestly, I was quite surprised that only $10,000 (10k) in equity has been saved up. I would also point out that the $60,000 interest-free loan still needs to be repaid. That’s probably not accounted for in the already tight financing, right?

Why do you expect a higher income in 1–2 years? Are you currently doing further training? Or is it just wishful thinking?

This whole thing is a pipe dream.
Only saved 10,000 (approximately 22,000) . Household net income of 4,400 (approximately 9,700) .
Forget it.