ᐅ Procedure for Building a New Single-Family Home on an Existing Plot of Land
Created on: 18 Nov 2022 07:55
D
Dachshund90
Hello everyone,
I know no one has a crystal ball here, but I would still like to hear your opinions:
We have just purchased a plot of land in Hesse, currently live cheaply, and have no urgent time pressure to build (although sooner is always better), except for the 5-year building obligation required by the municipality, which, however, can be extended by 1-2 years for justified reasons. We have slowly started planning and would like to possibly have the completed plans along with the building permit for our new single-family home ready to go, so we can react relatively quickly.
My assessment is that construction prices and interest rates will change little in 2023, even if they might stabilize at a high level. How 2024 or 2025 will look, of course, no one knows. But what is your feeling:
1. Rush the planning and possibly take advantage of a small "interest dip" in 2023 for financing and start with the belief that neither interest rates nor prices will significantly fall in the medium term, and waiting is just lost time.
2. Plan completely calmly, continue to build up equity, and assume that conditions for a new build may improve by the end of 2024 or possibly 2025.
If things become more concrete soon, I would be happy to provide more information for planning and share your feedback.
I welcome any questions and opinions 🙂
Best regards
I know no one has a crystal ball here, but I would still like to hear your opinions:
We have just purchased a plot of land in Hesse, currently live cheaply, and have no urgent time pressure to build (although sooner is always better), except for the 5-year building obligation required by the municipality, which, however, can be extended by 1-2 years for justified reasons. We have slowly started planning and would like to possibly have the completed plans along with the building permit for our new single-family home ready to go, so we can react relatively quickly.
My assessment is that construction prices and interest rates will change little in 2023, even if they might stabilize at a high level. How 2024 or 2025 will look, of course, no one knows. But what is your feeling:
1. Rush the planning and possibly take advantage of a small "interest dip" in 2023 for financing and start with the belief that neither interest rates nor prices will significantly fall in the medium term, and waiting is just lost time.
2. Plan completely calmly, continue to build up equity, and assume that conditions for a new build may improve by the end of 2024 or possibly 2025.
If things become more concrete soon, I would be happy to provide more information for planning and share your feedback.
I welcome any questions and opinions 🙂
Best regards
Dachshund90 schrieb:
to already have the completed plans, possibly including the building permit / planning permission for our new single-family house, ready and on hand to be able to respond relatively quickly. The building permit / planning permission has an expiration date; you cannot just take it out after 3 years and start building immediately.
Dachshund90 schrieb:
We will definitely manage for another 1-2 years like this, realistically we will need something bigger in about 3 years.The 1-2 years represent the realistic construction timeline, including planning, building permits / planning permission, finding a contractor, construction, and moving in. That means start now.
Building a house takes time.
D
Dachshund9018 Nov 2022 12:02Nida35a schrieb:
The building permit has an expiration date; you can’t just take it out after 3 years and start building. An initial discussion with an architect showed that the building permit is valid for 3 years, and an extension is usually not a big issue. That would probably be enough time for us, no matter when.
Nida35a schrieb:
1 to 2 years is a realistic construction period, including planning, permits, finding a contractor, building, and moving in.
So, start now.
Building a house takes time. Okay, yes, depending on how you build. We probably don’t have much time to wait. And I really don’t expect any improvement next year. So we’ll have to bite the bullet.
In any case, we will push the planning forward in the next few weeks/months. I’ll be happy to come back to the forum then.
Best regards
D
Dachshund9018 Nov 2022 12:14PS: I am of course happy to hear any further opinions 🙂
X
xMisterDx18 Nov 2022 14:56What speaks against starting the building planning as soon as possible?
Building up equity is a tricky matter. How did you plan to manage that so quickly within 2 years? Keep in mind that construction costs increase every year. If you pay 500,000 EUR in 2023, it could already be 530,000 EUR in 2024. You can’t save to offset that increase.
Aside from that, as already mentioned, you currently have to expect a construction period of 1 to 2 years anyway.
If you order the heat pump today, it will probably arrive around mid-2024.
Whether there will be any short-term improvement, I don’t believe so. Maybe slowly from 2024 onwards… but that’s not certain.
Building up equity is a tricky matter. How did you plan to manage that so quickly within 2 years? Keep in mind that construction costs increase every year. If you pay 500,000 EUR in 2023, it could already be 530,000 EUR in 2024. You can’t save to offset that increase.
Aside from that, as already mentioned, you currently have to expect a construction period of 1 to 2 years anyway.
If you order the heat pump today, it will probably arrive around mid-2024.
Whether there will be any short-term improvement, I don’t believe so. Maybe slowly from 2024 onwards… but that’s not certain.
I imagine interest rates might look better in a few years, but I wouldn’t bet on it. When it comes to construction costs and general material shortages or similar issues, the situation isn’t exactly simple right now, and I don’t see a major change coming in the near future. It seems that shortages of building materials are shifting somewhat—for example, wood is becoming more readily available again, while roof tiles are scarcer. This might ease somewhat over the next few years, so there could possibly be potential for some building materials to become cheaper. On the other hand, it’s also quite possible that some of these issues will continue for more than five years (which might be too long for you). Even then, you might actually be better off starting now because general inflation on other materials and rising labor costs may offset any price drops in currently overpriced materials.
In my opinion, noticeably more affordable new houses are more likely to come from cutting back on extras and focusing on essentials again, rather than from a drop in today’s inflated prices. For example, here in a secondary city, there were several new townhouse developments priced over 850,000 (currency) with lots of extras—terraces plus two balconies, smart home features, garages, and so on. A year ago, some people found that more manageable than today… even well-off buyers are now cutting many of these extras.
This is something you can already address with your project today: simplify to the essentials and identify areas where things can be added later if needed.
This is just my guess and conclusion: no idea! If you can afford it now, I’d probably start sooner rather than later. After all, that means you’re out of renting and start paying off your home. If you can’t afford it now… well, then you either try to scale back to something affordable or wait and see what happens. If it’s affordable, worst case, you might simply not get the best deal.
For myself, I’ve realized: of course I’d be annoyed if interest rates dropped sharply next year and I was stuck for another nine years in a fixed-rate mortgage with high interest (we have a longer fixed-term, but you can cancel after that). But as long as we don’t have to count every penny and can still live fairly comfortably, it’s not really that important to me in the end.
In my opinion, noticeably more affordable new houses are more likely to come from cutting back on extras and focusing on essentials again, rather than from a drop in today’s inflated prices. For example, here in a secondary city, there were several new townhouse developments priced over 850,000 (currency) with lots of extras—terraces plus two balconies, smart home features, garages, and so on. A year ago, some people found that more manageable than today… even well-off buyers are now cutting many of these extras.
This is something you can already address with your project today: simplify to the essentials and identify areas where things can be added later if needed.
This is just my guess and conclusion: no idea! If you can afford it now, I’d probably start sooner rather than later. After all, that means you’re out of renting and start paying off your home. If you can’t afford it now… well, then you either try to scale back to something affordable or wait and see what happens. If it’s affordable, worst case, you might simply not get the best deal.
For myself, I’ve realized: of course I’d be annoyed if interest rates dropped sharply next year and I was stuck for another nine years in a fixed-rate mortgage with high interest (we have a longer fixed-term, but you can cancel after that). But as long as we don’t have to count every penny and can still live fairly comfortably, it’s not really that important to me in the end.