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
You have studied for a long time, are in your early 30s, but highly specialized? How long have you been working, maybe 5 years? You still have another 40 years or so ahead in your career! Specializations can be changed. However, you have to want that. I myself spent the first ~8 years of my career in a niche and earned very well from it, but with family and relocation issues, things can change.
And after parental leave and subsequent part-time work, to put it bluntly, specialization tends to be over anyway. I regularly see this with women in the company who return and wonder why they no longer get assigned top projects when working 25–30 hours per week. One even wanted a fantastic 10-hour workweek to return, but please in the old position. Pipe dreams.
And after parental leave and subsequent part-time work, to put it bluntly, specialization tends to be over anyway. I regularly see this with women in the company who return and wonder why they no longer get assigned top projects when working 25–30 hours per week. One even wanted a fantastic 10-hour workweek to return, but please in the old position. Pipe dreams.
HilfeHilfe schrieb:
650 cold? Sorry, then you should increase your savings rate even more.Definitely!
Or how have you planned for situations when a child vomits and you need to pick up the kids quickly from daycare?I don’t think they have thought that far ahead yet. There are so many things related to children that you don’t consider in advance because it doesn’t even occur to you to think about them… and then there are the points that catch you completely off guard. We are no different.
Does it have to be Munich, or could it also be another major city?
Aren’t the truly economically strong cities almost interchangeable? Are Hamburg, Frankfurt, Berlin, Stuttgart, or even Hannover really such a breakthrough in construction costs? Because if you need something very specialized, then Rostock probably won’t work.
And what about “home”?
I would think very differently about the location of the two: Move straight into the city. Look for a condominium. It doesn’t matter what it costs. The money is available. Give up commuting. Possibly give up one car, or even both (car sharing). Then work and family life could also become compatible. Karsten
And what about “home”?
I would think very differently about the location of the two: Move straight into the city. Look for a condominium. It doesn’t matter what it costs. The money is available. Give up commuting. Possibly give up one car, or even both (car sharing). Then work and family life could also become compatible. Karsten
HilfeHilfe schrieb:
It depends. Salaries like that are more common in office jobs. Employers are gradually becoming more open to home office options. Colleagues who have to drive about 15 km (9 miles) into Frankfurt need almost as much time searching for parking as I do commuting 70 km (43 miles) by train. I feel more relaxed at work because I could sleep a bit or read a book. One hour is absolutely reasonable. Where we are, you can sometimes be lucky just to get a seat on the train towards FFM [emoji16]
Hello,
just to say this very carefully and politely:
If you earn 6500 euros net and only spend about 1000€ on housing, yet still only have around 15,000€ left per year, you should seriously reconsider your spending habits and budget discipline before buying.
In other words: how on earth do you manage to spend 4250€ (6500-1250-1000) per month just on living expenses for two people??? That’s your choice, but are you eating only caviar and drinking champagne?
If you’re not able to significantly reduce that, you will almost certainly face real financing problems later.
Regarding prices: yes, with your income you are fully in the “supply and demand” market, and since you don’t have children yet, there is really no reason for anyone to subsidize your building plot.
Although I personally find “locals-only” housing schemes morally questionable. First, the municipality gives away plots to “locals” (which is legally questionable—there have already been some court cases about this—and secondly, at least here in the Nuremberg area, the best plots surprisingly always go to local council members), and then daycare fees are raised because the municipality is broke...
Discounted allocation for families, sure, but wanting to buy cheaper just because the couple has lived somewhere for a while?!? Why should that be the case?
Best regards,
Andreas
just to say this very carefully and politely:
Hanneshickel schrieb:
at some point only working part-time. then 6500€ quickly becomes 5000€ or less. and then I wouldn’t want to have to pay 2500€ for the house.
What I didn’t mention is that we have a very, very cheap apartment (120sqm (1300 sq ft)) and only pay 650€ rent.
If you earn 6500 euros net and only spend about 1000€ on housing, yet still only have around 15,000€ left per year, you should seriously reconsider your spending habits and budget discipline before buying.
In other words: how on earth do you manage to spend 4250€ (6500-1250-1000) per month just on living expenses for two people??? That’s your choice, but are you eating only caviar and drinking champagne?
If you’re not able to significantly reduce that, you will almost certainly face real financing problems later.
Regarding prices: yes, with your income you are fully in the “supply and demand” market, and since you don’t have children yet, there is really no reason for anyone to subsidize your building plot.
Although I personally find “locals-only” housing schemes morally questionable. First, the municipality gives away plots to “locals” (which is legally questionable—there have already been some court cases about this—and secondly, at least here in the Nuremberg area, the best plots surprisingly always go to local council members), and then daycare fees are raised because the municipality is broke...
Discounted allocation for families, sure, but wanting to buy cheaper just because the couple has lived somewhere for a while?!? Why should that be the case?
Best regards,
Andreas
HilfeHilfe schrieb:
1h is absolutely reasonable It is not. No sugarcoating helps here. Anything is better than wasted time.
I was once as "highly specialized" and could only work in Hamburg with a daily 30-minute (about 20 miles) commute each way. A meaningless life. 2.5 years – then it was over. Learned a lot – but above all, not to waste your life on the road.