ᐅ No building plot available due to new EU local residency model?
Created on: 11 Nov 2017 21:49
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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
I also find it reasonable from a social perspective. Try finding an apartment for a family of four, with at least 4 rooms, preferably 5. With a landlord who doesn’t mind children making noise in the building and accepts the higher wear and tear.
Just quickly checked on a property listing site. In Munich, 3-room apartments have 665 listings, 4-room apartments 247 listings, and 5-room apartments 63 listings.
Just quickly checked on a property listing site. In Munich, 3-room apartments have 665 listings, 4-room apartments 247 listings, and 5-room apartments 63 listings.
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HilfeHilfe12 Nov 2017 08:57kaho674 schrieb:
A good income mainly depends on the location. 6500 net in Munich is probably normal to moderate. Building a house there is already difficult. 6500 in Mecklenburg would make building a house very easy.
And then you get absurd things like a 1-hour commute. Anyone who does that hasn’t realized yet that time is the most valuable thing you have. It depends. Such salaries are more common in office jobs. Employers are slowly opening up to home office options. Colleagues who drive about 15 km (9 miles) into Frankfurt spend almost as much time looking for parking as I do commuting by train over 70 km (43 miles). I arrive at work more relaxed because I could still sleep or read a book. A 1-hour commute is absolutely reasonable.
Why are you looking along the A94? Do you plan to commute to Munich by car in the future?
By the way, I also think it’s risky for many people to build under the conditions of a local model (low equity and low income). But the other consequence would be that such people could only build in the most remote areas without proper infrastructure or not at all. And I would find that even worse.
By the way, I also think it’s risky for many people to build under the conditions of a local model (low equity and low income). But the other consequence would be that such people could only build in the most remote areas without proper infrastructure or not at all. And I would find that even worse.
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Hanneshickel12 Nov 2017 09:26I am not tied to Munich, but my wife is highly specialized and has to travel there regularly. There are no jobs for her outside of Munich. Therefore, the A94 route is a natural choice. She has been commuting into Munich for at least an hour for many years and is used to it. I also wonder how much longer she can keep doing this.
I don’t see a problem arranging financing based on our current salary, but what if we have children and my wife stays at home for several years or eventually works only part-time? Then the 6,500€ (around $7,000) could quickly drop to 5,000€ (around $5,400) or less. I’d rather not have to pay 2,500€ (around $2,700) a month for the house under those circumstances.
What I haven’t mentioned is that we currently have a very cheap apartment (120 square meters (1,292 square feet)) with a rent of only 650€ (about $700) including utilities. The question is whether it might make sense to just stay there for the next few years. However, the risk is that in 5 to 10 years, house prices could be much higher, especially once the A94 is finally completed (construction end scheduled for Q4/2019).
If we exceed our limit and start looking at smaller villages that are quite a distance from the A94, prices are lower, but commuting from there would no longer be feasible.
I don’t see a problem arranging financing based on our current salary, but what if we have children and my wife stays at home for several years or eventually works only part-time? Then the 6,500€ (around $7,000) could quickly drop to 5,000€ (around $5,400) or less. I’d rather not have to pay 2,500€ (around $2,700) a month for the house under those circumstances.
What I haven’t mentioned is that we currently have a very cheap apartment (120 square meters (1,292 square feet)) with a rent of only 650€ (about $700) including utilities. The question is whether it might make sense to just stay there for the next few years. However, the risk is that in 5 to 10 years, house prices could be much higher, especially once the A94 is finally completed (construction end scheduled for Q4/2019).
If we exceed our limit and start looking at smaller villages that are quite a distance from the A94, prices are lower, but commuting from there would no longer be feasible.
Stay in this affordable apartment and wait a bit longer. In a few years, the current real estate bubble will burst here as well – including in and around Munich – and then there will be good opportunities at foreclosure sales. No construction hassle and a relatively new house, and you will be in a strong financial position... You have time anyway!
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HilfeHilfe12 Nov 2017 09:39Hanneshickel schrieb:
I’m not tied to Munich, but my wife is so highly specialized that she always has to travel there for work. There are no jobs for her outside the city. So the A94 highway is the obvious choice. She has been commuting at least 1 hour into Munich for many years and is used to it. I also wonder how much longer she can keep doing that.
I don’t see a problem financing the house with our current income, but what if we have children and my wife stays home for several years or later only works part-time? Then the 6,500€ (around $7,000) quickly drops to 5,000€ (around $5,400) or less. I wouldn’t want to have to pay 2,500€ (around $2,700) per month for the house in that situation.
What I haven’t mentioned is that we have a very, very affordable apartment (120m² (1,290 sq ft)) and only pay 650€ (around $700) rent excluding utilities. The question is whether we should just stay there for the next few years. The risk is, however, that house prices will be much higher in 5–10 years once the A94 is finally completed (construction scheduled to finish Q4/2019).
If we go beyond our limit and look in small villages quite far from the A94, prices are low, but commuting then becomes impossible. 650 cold rent? Sorry, then you should increase your savings rate even more. If I were you, I wouldn’t ask where to build cheaply but rather where to settle for future planning. If your wife is highly specialized, she probably won’t want to commute over an hour with children while working part-time. How have you planned to handle it if a child is sick or you need to pick them up quickly from daycare?
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