ᐅ Is Buying a House a Wise Decision in the Current Market Situation?
Created on: 23 Sep 2020 14:32
A
Alibert87
Good day and hello everyone,
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
P
Pinkiponk31 Mar 2022 12:18Alibert87 schrieb:
I would like to start a discussion among those who, like us, cannot find a suitable property and what their plans or alternatives are. We are not in exactly the same situation as you, but until three years ago we were. Therefore, I hope I am allowed to comment. Otherwise, please feel free to ignore my contribution without taking offense.
Alibert87 schrieb:
... no longer have any chance. Do you see no chance anymore, or do you objectively have no chance anymore?
Alibert87 schrieb:
1. Consider at least buying a barrier-free condominium and renting it out A condominium to move into yourselves? I haven’t read the entire thread and therefore don’t know if you are looking for a single-family home for yourselves or if a condominium would also be acceptable.
Alibert87 schrieb:
2. Look outside our preferred locations – not an option for us There are absolute preferred locations, acceptable preferred locations, and approximate preferred locations. We decided on an approximate preferred location.
I’m missing alternative 4: making larger compromises. But perhaps you are already willing to do so and just haven’t mentioned it in this post.
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neo-sciliar31 Mar 2022 12:51Hello @Alibert87,
Back in 2020, I was skeptical that this would work out. Now, 18 months later, has your equity increased by 18 times the monthly repayment, or have you postponed the end of your financing by 18 months (beware of retirement starting), or have you increased the monthly repayment? I remember you had already planned very tightly back then (considering that one income would be lost) – additionally, both prices and financing costs have increased significantly over the past 18 months.
I haven’t read all 18 pages here, but it seems to me that your plan is not feasible as it stands. "Accept it, change it or leave it." You are not willing to make any compromises, so the only option left is to abandon your project. I don’t know exactly where you want to build or buy, but if there is nothing suitable there, then that’s how it is.
Back in 2020, I was skeptical that this would work out. Now, 18 months later, has your equity increased by 18 times the monthly repayment, or have you postponed the end of your financing by 18 months (beware of retirement starting), or have you increased the monthly repayment? I remember you had already planned very tightly back then (considering that one income would be lost) – additionally, both prices and financing costs have increased significantly over the past 18 months.
I haven’t read all 18 pages here, but it seems to me that your plan is not feasible as it stands. "Accept it, change it or leave it." You are not willing to make any compromises, so the only option left is to abandon your project. I don’t know exactly where you want to build or buy, but if there is nothing suitable there, then that’s how it is.
A
Alibert8731 Mar 2022 13:08Myrna_Loy schrieb:
That doesn’t sound arrogant, but rather like denial of reality. I also have colleagues who would prefer living as permanent campers rather than leaving the greater Starnberg area. But does it really make someone happy to face the bitterness every day of never becoming one of the fortunate homeowners? Our attitude is actually that where we live is more important than how we live. So owning a home is not a heartfelt desire right now. It would just be nice for the children, and I wouldn’t be annoyed by the “rental renters” 🙂
W
WilderSueden31 Mar 2022 13:09Alibert87 schrieb:
Our attitude is actually that where we live is more important than how we live. So owning property is not a heartfelt wish right now. It would just be great for the children, and I wouldn’t be annoyed by the “renting renters” 🙂Then you have the answer. Look for an appropriately sized rental and invest the saved equity.B
Benutzer20031 Mar 2022 13:13Alibert87 schrieb:
It would just be great for the kids They don’t care about the location. But that changes when they are "cooped up" in a small rental apartment instead of being able to go outside to the garden.
However, you don’t seem to be thinking about the kids right now, but rather for the kids and for yourself.
At least, that’s how it reads.
M
Myrna_Loy31 Mar 2022 13:17Benutzer200 schrieb:
They don't care about the location. But that changes when they have to be "crammed" into a small rental apartment instead of being able to go outside into the garden.
However, you are not thinking about the kids themselves right now, but only about the kids and yourself.
At least that's how it reads. Well, good schools, good sports, music, and support programs, swimming pools, climbing gyms, and so on are also very valuable once the children are past the toddler stage.