ᐅ Should I buy a plot of land now to start building in 2023 or 2024?
Created on: 7 May 2022 15:18
R
rifoxa4902
Hello everyone,
I’ve been following this forum for a few weeks now and I’m currently finding it very difficult to make a decision regarding our house building plans. There have been similar posts here over the past days/weeks, and as far as I can tell, I am not alone in facing this kind of decision.
A bit of background:
Last year, we initially tried to find an existing property. However, many rather unpleasant experiences with the houses on offer, the agents, and bidding processes led to frustration on my part, and I ended up investing a lot of energy into searching for a building plot instead.
In the search for a plot, I seem to have had either a lot of luck or skill (or both), as I now have the opportunity to buy a municipal plot under good conditions (however, unfortunately with a building obligation requiring construction to start no later than 2024 and completion within 3 years plus 2 years).
As it often happens, I got the confirmation for the plot at roughly the same time interest rates increased sharply and the Ukraine crisis began.
Right now, we are quite unsettled due to the currently unpredictable construction cost situation. We would rather not start building this year and are considering whether to secure the plot for a building start in 2023 or 2024 instead. Or possibly to abandon the idea of building altogether, although existing properties are not getting any cheaper either.
Some key facts about us:
- Desired house size (single-family home): 100-120 sqm (simple standard, nothing fancy, a basic kitchen is fine, no basement, simple driveway)
- Ages: 43 (male) and 38 (female), 1 child aged 4, no further children planned
- Net income (combined): over 5,300 euros net per month (plus various bonus payments amounting to several thousand euros), the female partner currently works part-time, with an additional net potential of about 800 euros
- Current equity: 210,000 euros (increasing by approximately 20,000 to 25,000 euros per year)
Our rough cost estimate for the house is as follows (feedback on whether this sounds roughly realistic is welcome):
- Plot costs (1,000 sqm (1,200 square yards)) including development, notary, tax: 85,000 euros (price fixed)
- Building location: Schleswig-Holstein
- Pure construction costs (estimated for 100-120 sqm): 300,000 euros
- Additional construction-related costs (estimated): 80,000 euros
- Total cost: 465,000 euros (minus equity leaves a financing requirement of 255,000 euros)
- With a monthly payment of 1,600 euros and an interest rate of 3%, we would need about 17 years to repay and finish before retirement.
Our naive assumption is that building under these calculations, if started now at current interest rates (3%) and construction costs, would work fairly well, but due to the currently unpredictable construction cost situation, it feels too risky (we don’t see much buffer in the loan repayment). Instead, we are considering securing the plot now, accumulating more equity by next year, and then starting to build in 2023 or 2024 (completing the build by 2026 at the latest).
What do you think about this? What would you do in our situation? (I have outlined a few options below.)
I would...
- start building as soon as possible despite the unpredictable construction cost situation (development likely only starting in August)
- secure the plot now despite the building obligation (with a latest start in 2024) and wait for a more cost-predictable situation in 2023 or 2024. If building cannot proceed in 2023 or 2024, simply give up the plot—but at least we would have preserved the opportunity to build
- not buy the plot at all, as construction costs and interest rates are expected to rise so much and so quickly that households with incomes like ours will no longer be able to build in the near future
- ...
Many thanks in advance for your evaluations and opinions.
I’ve been following this forum for a few weeks now and I’m currently finding it very difficult to make a decision regarding our house building plans. There have been similar posts here over the past days/weeks, and as far as I can tell, I am not alone in facing this kind of decision.
A bit of background:
Last year, we initially tried to find an existing property. However, many rather unpleasant experiences with the houses on offer, the agents, and bidding processes led to frustration on my part, and I ended up investing a lot of energy into searching for a building plot instead.
In the search for a plot, I seem to have had either a lot of luck or skill (or both), as I now have the opportunity to buy a municipal plot under good conditions (however, unfortunately with a building obligation requiring construction to start no later than 2024 and completion within 3 years plus 2 years).
As it often happens, I got the confirmation for the plot at roughly the same time interest rates increased sharply and the Ukraine crisis began.
Right now, we are quite unsettled due to the currently unpredictable construction cost situation. We would rather not start building this year and are considering whether to secure the plot for a building start in 2023 or 2024 instead. Or possibly to abandon the idea of building altogether, although existing properties are not getting any cheaper either.
Some key facts about us:
- Desired house size (single-family home): 100-120 sqm (simple standard, nothing fancy, a basic kitchen is fine, no basement, simple driveway)
- Ages: 43 (male) and 38 (female), 1 child aged 4, no further children planned
- Net income (combined): over 5,300 euros net per month (plus various bonus payments amounting to several thousand euros), the female partner currently works part-time, with an additional net potential of about 800 euros
- Current equity: 210,000 euros (increasing by approximately 20,000 to 25,000 euros per year)
Our rough cost estimate for the house is as follows (feedback on whether this sounds roughly realistic is welcome):
- Plot costs (1,000 sqm (1,200 square yards)) including development, notary, tax: 85,000 euros (price fixed)
- Building location: Schleswig-Holstein
- Pure construction costs (estimated for 100-120 sqm): 300,000 euros
- Additional construction-related costs (estimated): 80,000 euros
- Total cost: 465,000 euros (minus equity leaves a financing requirement of 255,000 euros)
- With a monthly payment of 1,600 euros and an interest rate of 3%, we would need about 17 years to repay and finish before retirement.
Our naive assumption is that building under these calculations, if started now at current interest rates (3%) and construction costs, would work fairly well, but due to the currently unpredictable construction cost situation, it feels too risky (we don’t see much buffer in the loan repayment). Instead, we are considering securing the plot now, accumulating more equity by next year, and then starting to build in 2023 or 2024 (completing the build by 2026 at the latest).
What do you think about this? What would you do in our situation? (I have outlined a few options below.)
I would...
- start building as soon as possible despite the unpredictable construction cost situation (development likely only starting in August)
- secure the plot now despite the building obligation (with a latest start in 2024) and wait for a more cost-predictable situation in 2023 or 2024. If building cannot proceed in 2023 or 2024, simply give up the plot—but at least we would have preserved the opportunity to build
- not buy the plot at all, as construction costs and interest rates are expected to rise so much and so quickly that households with incomes like ours will no longer be able to build in the near future
- ...
Many thanks in advance for your evaluations and opinions.
motorradsilke schrieb:
Please don’t generalize all the time. It can also go faster, depending on how much effort is put in and how the building authority works. “ALWAYS”
“Please don’t generalize always.”
“Uhh... Always generalize? :p That’s really funny!
Can you understand the term ‘with certainty’? That’s different from ‘always’.
‘With certainty’ means you can assume something, but it could also turn out differently.
Always is 100% and leaves no room for exceptions.
You know what, Silke:
I notice that you like to pick on me and criticize my comments.
Look, others have addressed this topic like I did and share the same opinion, but you only quote me.
Here:
ypg schrieb:
Planning and building permits / planning permission will certainly extend into the new year. And here:
11ant schrieb:
I do expect to be able to get materials and tradespeople in 2024. Or here:
k-man2021 schrieb:
You can plan your construction start according to the situation in 2023/2024. I mean, I do enjoy replying to you, but wouldn’t it be more valuable for the forum in general to answer the questions rather than criticize my responses?
Now, since the infrastructure development is still going to take a while here, why should rushing be good advice?
M
motorradsilke8 May 2022 12:39ypg schrieb:
"ALWAYS"
"Please don’t generalize always."
"Uh… do I always generalize? :p That’s really funny!
Are you familiar with the term 'with certainty'? That’s different from 'always.'
'With certainty' means you can assume something, but it could also turn out otherwise.
Always means 100% without any exceptions.
You know what, Silke:
I notice you like to pick on me and criticize my comments.
Look, others have raised the same topic and share the same opinion, but you only quote me.
Here:
And here:
Or here:
I mean, I do enjoy responding to you, but wouldn’t it be more valuable for the forum to answer the questions rather than criticize my replies?
As it stands, the site development will still take a while, so why should rushing be a good guide?" That’s probably because you often generalize. "With certainty" means you can assume something, but that’s not always the case. There are plenty of situations where it goes faster. And the other two quotes mention later construction start times but nowhere say that it can’t happen sooner.
We recently talked about the wood, where you said there is no wood available. Or about the kitchen, which in your opinion must be included in the building permit / planning application.
Your posts give others the impression that these things are mandatory. That unsettles people who don’t have experience.
Don’t get me wrong, you also offer a lot of great advice 😉.
motorradsilke schrieb:
Your posts give others the impression that this is absolutely mandatory. This was about your question regarding what is defined as necessary. The answer may be somewhat lengthy and complicated, but the core of it is clear. When it comes to residential buildings that require approval, there are defined regulations by definition.
ypg schrieb:
This is mandatory for residential units. Running water is included, as well as drainage to the sewer system. Cooking facilities as well. Your nice-to-haves are not. Ultimately, I could write ten great posts, but with the eleventh faster reply, Silke’s generalization police shows up, because Yvonne “always” generalizes 😉 In a forum, it’s often necessary to read the sentence several times and in different ways.
It’s kind of crazy with you 😎
Enough off-topic from me now.
B
Benutzer2008 May 2022 15:35Neubau2022 schrieb:
This is also how we are currently building. The child's room is 15.5 sqm (167 sq ft). 6 sqm (65 sq ft) is sufficient for a bed, desk, and a small wardrobe.
Very young children = daycare, crib, or staying in the living room with the parents.
Slightly older children = playing a little on the floor in their room, otherwise spending time in the living room.
Children becoming teenagers = mostly staying in bed using their phone/tablet, watching TV, or sitting at the computer.
Almost adult children = either with their boyfriend/girlfriend in bed or alternatively out and about, partying.
H
Hutchinson1238 May 2022 17:08Our two rooms next to the bedroom (16 m² (172 sq ft)) are 10 and 11 m² (108 and 118 sq ft).
The 11 m² (118 sq ft) room faces southwest and is currently used as an office.
The 10 m² (108 sq ft) room faces northeast and will be the children's room.
This is better for the early years, as it does not heat up as much.
I think that’s more than enough. If needed, we can always rearrange later since we still have an additional 50 m² (538 sq ft) of usable floor space (37 m² (398 sq ft) living area) in the attic.
As long as everything fits, that’s great.
I believe children today are already overwhelmed with too much unnecessary, colorful clutter anyway.
The 11 m² (118 sq ft) room faces southwest and is currently used as an office.
The 10 m² (108 sq ft) room faces northeast and will be the children's room.
This is better for the early years, as it does not heat up as much.
I think that’s more than enough. If needed, we can always rearrange later since we still have an additional 50 m² (538 sq ft) of usable floor space (37 m² (398 sq ft) living area) in the attic.
As long as everything fits, that’s great.
I believe children today are already overwhelmed with too much unnecessary, colorful clutter anyway.
Hutchinson123 schrieb:
Our two rooms next to the bedroom (16 sqm (172 sq ft)) are 10 and 11 sqm (108 and 118 sq ft).
The one with 11 sqm (118 sq ft) faces southwest and is currently used as an office.
The 10 sqm (108 sq ft) room faces northeast and will be the children's room.
This is better for the early years since it doesn’t heat up as much.
I think that’s completely sufficient. If necessary, you can always rearrange later, as we still have an extension reserve of 50 sqm (538 sq ft) floor area (37 sqm (398 sq ft) living space) in the attic. I also think that’s enough.
In my opinion, the reason children like to play in the living room is less about the size of the room and more about the location of the rooms.
I hardly know any children who enjoy playing alone in an otherwise empty upstairs area. They don’t get to see what’s happening downstairs, which is probably why playing in the living room is appealing – everyone is there and you hear what the parents are saying.
We lived on the ground floor, and we preferred to play in my parents’ study, which was right next to the living room.
Similar topics