Hello everyone,
I have been visiting this forum as a guest for some time now and have reached the point where I would like to gather various opinions from other members.
Last July, we purchased a 400sqm (4,300 sq ft) plot of land at 750€ per sqm (750€ per 11 sq ft) (yes, I know, it’s small). We financed this plot with an interest rate of 0.9%. Since a two-family house was planned (or was supposed to be built) on this small plot, the planning process took a while due to several necessary appointments with the local authorities.
Now that the plan is finished, we are facing the current chaos in the construction industry.
Construction costs are skyrocketing, interest rates seem to rise daily, and inflation is high. Had I known what this year would bring, well, hindsight is 20/20! But no use dwelling on “what ifs.”
So here we are: the land is financed under relatively good conditions, but the situation in the building industry is telling me personally, “do everything you can, but just don’t start building now.” Beyond the soaring prices, I am especially deterred by material shortages that could lead to unpredictable delays. I don’t want to give up my apartment because I plan to have the house ready to move into within three months, only to end up without a roof over my head.
Some might say, “Well, great, you financed the land under good conditions—perfect during inflation!” but I’m a bit skeptical about that. For one thing, the land at 750€ per sqm was not exactly a bargain. Currently, due to scarcity of plots, prices are being pushed up to around 1000€ per sqm (1000€ per 11 sq ft) in some cases, but I attribute this rather to a small “bubble” created by people rushing to secure still decent conditions by buying anything available.
Moreover, from next year onward, it will reportedly become much harder for the average person to finance property as new regulations are coming into effect. Coupled with already rising interest rates, I fear the real estate market might at least soften somewhat, which could also affect land value assessments. This brings me to my question:
I know this is partly speculation, but I would like to hear what others think.
How do you see this? Do you believe land value assessments will be spared from any “drops”?
What would you do in my position? Keep the land, pay it off, and just watch how things develop over the next few years, maybe waiting for the right moment to start building?
If you ask me, I think it would be wise to sell the plot as soon as possible while there are still enough buyers willing to build. I expect the plot’s value to decrease starting next year due to new regulations and rising interest rates. The plot is only suitable for one family, and financing will become significantly more difficult for them then.
I’m looking forward to an active discussion and thank you in advance for your attention!
Best regards
I have been visiting this forum as a guest for some time now and have reached the point where I would like to gather various opinions from other members.
Last July, we purchased a 400sqm (4,300 sq ft) plot of land at 750€ per sqm (750€ per 11 sq ft) (yes, I know, it’s small). We financed this plot with an interest rate of 0.9%. Since a two-family house was planned (or was supposed to be built) on this small plot, the planning process took a while due to several necessary appointments with the local authorities.
Now that the plan is finished, we are facing the current chaos in the construction industry.
Construction costs are skyrocketing, interest rates seem to rise daily, and inflation is high. Had I known what this year would bring, well, hindsight is 20/20! But no use dwelling on “what ifs.”
So here we are: the land is financed under relatively good conditions, but the situation in the building industry is telling me personally, “do everything you can, but just don’t start building now.” Beyond the soaring prices, I am especially deterred by material shortages that could lead to unpredictable delays. I don’t want to give up my apartment because I plan to have the house ready to move into within three months, only to end up without a roof over my head.
Some might say, “Well, great, you financed the land under good conditions—perfect during inflation!” but I’m a bit skeptical about that. For one thing, the land at 750€ per sqm was not exactly a bargain. Currently, due to scarcity of plots, prices are being pushed up to around 1000€ per sqm (1000€ per 11 sq ft) in some cases, but I attribute this rather to a small “bubble” created by people rushing to secure still decent conditions by buying anything available.
Moreover, from next year onward, it will reportedly become much harder for the average person to finance property as new regulations are coming into effect. Coupled with already rising interest rates, I fear the real estate market might at least soften somewhat, which could also affect land value assessments. This brings me to my question:
I know this is partly speculation, but I would like to hear what others think.
How do you see this? Do you believe land value assessments will be spared from any “drops”?
What would you do in my position? Keep the land, pay it off, and just watch how things develop over the next few years, maybe waiting for the right moment to start building?
If you ask me, I think it would be wise to sell the plot as soon as possible while there are still enough buyers willing to build. I expect the plot’s value to decrease starting next year due to new regulations and rising interest rates. The plot is only suitable for one family, and financing will become significantly more difficult for them then.
I’m looking forward to an active discussion and thank you in advance for your attention!
Best regards
S
Sir_Batman10 Apr 2022 16:17The situation clearly calls for an objective approach.
Please introduce the project. What is the initial financial situation like?
Basically, I would also be in favor of keeping the plot, but if building becomes unrealistic, it doesn’t really make sense. In that case, it’s better to sell and invest the profit in something else.
Please introduce the project. What is the initial financial situation like?
Basically, I would also be in favor of keeping the plot, but if building becomes unrealistic, it doesn’t really make sense. In that case, it’s better to sell and invest the profit in something else.
P
Pinkiponk10 Apr 2022 17:40Renat11 schrieb:
I am no longer able to tolerate the stomping, shouting, arguing, and so on from the neighbors, nor is the space sufficient for me—especially now that the little one is here. ... those pests do other things to the car, which is why I personally won’t buy an "expensive" car anymore.
Well, I have an appointment at the bank next week, so I’m curious what will come of it. I’ll keep you updated! Your house might not end up being that expensive if you focus first on addressing the difficulties you mentioned above.
- Perhaps you could build a gable roof house and only finish the attic at a later stage. That way, you’ll also find out whether you really need two full floors or if one floor might be comfortably sufficient for you. This approach would get rid of the neighbors you had before and would also give you more space, including a garden.
- Maybe you want to buy a house that is already planned for an extension or where an extension has been thoughtfully integrated. Instead of adding something on afterward in a makeshift way, you could choose a house from the same builder that allows for an extension without looking unfinished without it. I have seen some attractive models like that.
- Regarding a garage, you could first test in the new area whether there is also a marten problem. If a garage is absolutely necessary due to martens, there is also the option to pay it off in installments with 0.00% interest. Yes, you still have to pay it, but smaller installments might feel less burdensome than taking out a larger loan all at once.
I wish you all the best for your bank appointment and look forward to your update. Be brave. ;-)
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