ᐅ Procedure for Building a New Single-Family Home on an Existing Plot of Land
Created on: 18 Nov 2022 07:55
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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
The question is how much you need to borrow or what your financial situation is. With so many room requirements, the budget can get quite high, so some fluctuations in interest rates hardly make a difference.
It’s best to have plans drawn up now because there might still be many adjustments needed to ensure the budget matches the room layout.
It’s best to have plans drawn up now because there might still be many adjustments needed to ensure the budget matches the room layout.
X
xMisterDx18 Nov 2022 18:46This is a high-stakes gamble. Construction prices will definitely not fall—how could that be justified fundamentally? Wages are currently rising (IG Metall +8.5% over 24 months plus 3,000 EUR), energy costs will remain higher than in 2019, and building material prices are stagnating at best.
No illusions should be made here; a significant portion of the now available craftsmen will be absorbed again by the massive upcoming investments in renewable energy and infrastructure.
Then there are the interest rates. They will only decrease again when inflation falls below the 2% target. That will take some time, because with inflation at 2%, interest rates are currently where the ECB, to be honest, should have been for about five years now.
One can hope for low interest rates over the next 7–10 years…but certainly not in the 2–3 year timeframe.
No illusions should be made here; a significant portion of the now available craftsmen will be absorbed again by the massive upcoming investments in renewable energy and infrastructure.
Then there are the interest rates. They will only decrease again when inflation falls below the 2% target. That will take some time, because with inflation at 2%, interest rates are currently where the ECB, to be honest, should have been for about five years now.
One can hope for low interest rates over the next 7–10 years…but certainly not in the 2–3 year timeframe.
D
danielohondo18 Nov 2022 19:41I can only recommend starting to plan now and then begin building. We bought our plot of land in September 2021 and the construction is only starting now in November. That means we will probably move in by December 2023. It takes more than 2 years including planning and construction.
Our child will already be 5 years old by then, and a garden is definitely used a lot at that age.
Our child will already be 5 years old by then, and a garden is definitely used a lot at that age.
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Dachshund9019 Nov 2022 12:43Thanks for your thoughts!
In the end, I already thought that we should definitely start with the planning and not wait too long. Still, it is reassuring to hear a few opinions that confirm this.
Among friends and family, people often say: wait 1-2 years, then everything will be easier and cheaper… but it’s not that simple. And yes, it takes time!
Of course, we still need to take a closer look at our financial situation to really know what we can afford during the planning phase.
Best regards!
In the end, I already thought that we should definitely start with the planning and not wait too long. Still, it is reassuring to hear a few opinions that confirm this.
Among friends and family, people often say: wait 1-2 years, then everything will be easier and cheaper… but it’s not that simple. And yes, it takes time!
ypg schrieb:
The question is how much you need to borrow or what your financial situation is. With so many room requirements, the budget goes up quite a bit, so some interest rate fluctuations hardly make a difference.
So get the planning done now, because many adjustments might still be needed to make the budget fit the room program.
Of course, we still need to take a closer look at our financial situation to really know what we can afford during the planning phase.
Best regards!
X
xMisterDx19 Nov 2022 13:27Dachshund90 schrieb:
(...)
Among friends, people often say: wait 1-2 years, then everything will be easier and cheaper… but it’s not that simple. And it takes time… that’s true!
(...)That’s easy to say, but fundamentally there is no evidence supporting this regarding construction costs. As mentioned, wages, building material prices, insulation requirements, and heating technology all influence costs. Where exactly would you expect significant price drops?
Where I could imagine a moderate price decline, though, is in land prices. But you have already bought that 😉
The real cost driver in recent years, except for 2021/22, has anyway been the land. A nationwide builder will construct a house in Munich at about the same price as in Mecklenburg-Vorpommern. But the land in Munich costs around one million euros, whereas in Mecklenburg-Vorpommern it might be only 50,000 EUR.
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allstar8319 Nov 2022 16:29Looking back and applying this to your situation, I would aim to start construction in the spring. Over the summer, things are usually much more relaxed.
In terms of costs and planning, I would (if possible) include everything right from the start. So, not building the garage five years later or something like that.
If you have a good architect, you can ask them where it makes sense to save money.
For example, are there parapets that can be built with masonry instead of expensive stainless steel? Can the garden be modeled together with the shell builder?
Pre-fabricated garage versus masonry garage? Etc.
A basement for friends went from 75,000 to 150,000 despite a lot of personal work... You can also create a lot of nice living space (or garage) above ground. We replaced the basement with a large open space (hobby, guest room, home office, basement replacement) in the attic. Nicely heated and with many Pax wardrobes.
Are there things you wouldn’t mind not having?
And honestly, a house with a garden is great for children.
Good luck!
In terms of costs and planning, I would (if possible) include everything right from the start. So, not building the garage five years later or something like that.
If you have a good architect, you can ask them where it makes sense to save money.
For example, are there parapets that can be built with masonry instead of expensive stainless steel? Can the garden be modeled together with the shell builder?
Pre-fabricated garage versus masonry garage? Etc.
A basement for friends went from 75,000 to 150,000 despite a lot of personal work... You can also create a lot of nice living space (or garage) above ground. We replaced the basement with a large open space (hobby, guest room, home office, basement replacement) in the attic. Nicely heated and with many Pax wardrobes.
Are there things you wouldn’t mind not having?
And honestly, a house with a garden is great for children.
Good luck!
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