ᐅ No building plot available due to new EU local residency model?
Created on: 11 Nov 2017 21:49
H
Hanneshickel
Hello everyone,
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
H
Hanneshickel11 Nov 2017 23:38We are even willing to move significantly further away from Munich to find a plot of land for building. Then we would both have at least a 1-hour (1-hour) one-way commute to work. If we move completely away, I also think the salary situation will look very different.
When we see some of the people during the property viewings, we feel like we belong more to the "average" group. Many of the people from Munich don’t seem to care about money at all. Houses or plots of land are often bought within minutes despite extremely high prices, without so much as batting an eye.
When we see some of the people during the property viewings, we feel like we belong more to the "average" group. Many of the people from Munich don’t seem to care about money at all. Houses or plots of land are often bought within minutes despite extremely high prices, without so much as batting an eye.
As I said, the situation with real estate prices in Munich and the surrounding areas has become completely insane. Everyone has to decide for themselves if and how much they want or need to get involved (apparently, you are in the fortunate position of not having to). We voted with our feet (not just because of the property prices) and escaped this madness before Söder became Minister President…
Why, he is right. That is the only way to get into the system. There is no other way. (Although, usually there is, namely with a severe disability status. But THEN it probably really becomes absurd.)
Moving far out and accepting a one-hour commute is even less compatible with a future family. The commuting time directly affects working hours and thus income.
The market down there is mercilessly overheated. And even if you are financially well-off, you can tell there are always (many) who are even better off. I think the bottom line is that this is the wrong time.
That the income hasn’t been stable for a long time is okay. I was more referring to the outlook for the future. A saving rate of €15,000 (about $16,000) per year with an income of €6,500 (about $7,000) is not much, but little.
Moving far out and accepting a one-hour commute is even less compatible with a future family. The commuting time directly affects working hours and thus income.
The market down there is mercilessly overheated. And even if you are financially well-off, you can tell there are always (many) who are even better off. I think the bottom line is that this is the wrong time.
That the income hasn’t been stable for a long time is okay. I was more referring to the outlook for the future. A saving rate of €15,000 (about $16,000) per year with an income of €6,500 (about $7,000) is not much, but little.
But this reflects reality. We initially received a verbal rejection because our income was too high. However, we were eventually granted the plot of land due to slightly lower earnings caused by parental leave benefits and the fact that our second child was on the way. Without the children, we would not have been approved.
H
HilfeHilfe12 Nov 2017 08:22The municipalities aim to attract families with several children and middle incomes. I think that is completely fair. You cannot expect to benefit from subsidized land with an above-average income just to become even wealthier. We have a net income of 5500 euros (about 5900 USD) with two children (this includes child benefits) and save 1000 euros (about 1070 USD). You really should speed up your savings now while you still can. Children cost money.
A good income mainly depends on the location. A net salary of 6,500 euros in Munich is probably average to modest. Building a house there is already difficult with that. With 6,500 euros in Mecklenburg, building a house would be quite easy.
And then you get absurd situations like a one-hour commute. Anyone doing that hasn’t yet realized that time is the most valuable thing you have.
And then you get absurd situations like a one-hour commute. Anyone doing that hasn’t yet realized that time is the most valuable thing you have.
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