ᐅ Question about a plot of land with site plan

Payday schrieb:

ps: €350 per square meter (about $410 per square yard) is quite a statement. The incomes must be good too...

No – it’s the demand, as I mentioned regarding population density, combined with available building land and infrastructure. The plots aren’t half the size of yours just for fun, but because the average homebuilder’s budget is roughly the same as yours. It’s just allocated differently between house and land.

Henrik0817123 schrieb:

I said the plot is over budget... we wanted to avoid exceeding 150,000 including additional purchase costs... here the larger one is 162,000 and the smaller 130,000

Offer 130,000 all-in for the lower one if you prefer it and see what happens. Or, fully prepared with an enlarged leveled area for 150,000 all inclusive; then the seller will have to act and realize the assumed land value.

Best regards
Dirk Grafe

Dirk Grafe schrieb:
No – the demand, as I mentioned regarding population density, combined with available building land and infrastructure. The plots are not half the size of yours for no reason, but because the average homebuilder’s budget is roughly the same as yours. Just distributed differently between house and land.

I offer €130,000 all-inclusive for the lower one, if you prefer, and we’ll see what happens. Or fully finished with a larger leveled area for €150,000 all-inclusive, then the seller should just activate and realize the assumed land value.

Best regards,
Dirk Grafe

Somehow this can’t be right. At €350 per square meter (sqm), the demand must be so high that the purchase price should probably be rounded up rather than down. The plots are naturally smaller so that anyone can afford them. €130,000 for the plot alone is still hefty. I once calculated that an extra €10,000 for the plot would mean 4 km (2.5 miles) less commuting over 20 years. So if I pay €50,000 more for the plot but get 20 km (12 miles) shorter commute to work, in the end, it balances out. This can justify the expensive plots again. Cheap plots in the middle of nowhere with a 30 km (19 miles) commute to work are basically worthless. The money is eventually spent, while the high land costs remain (unless the area becomes worthless due to certain events like an airport flight path or all major companies moving away).

Still, it’s supply and demand. If every “middle-class employee” can afford €350 per sqm, the income must be higher there. Because where we are, nobody can drop €130,000 net for a plot. We paid just under €63,000 net (net = without additional costs but including VAT) and are already in the upper middle range here, since the location is quite decent.
As I said, in the end, high sqm prices are advantageous because the value does not diminish and you also get a “return” for it (e.g., close to town center, short commutes, large industry or similar nearby) and this also makes it easier to sell a house later.

Payday schrieb:
Somehow that can’t be right.

I’m seriously wondering what’s wrong with you. You have absolutely no clue about property valuation, yet you keep speculating wildly.

At €350/m² (about $335/ft²), demand must be so enormous that the purchase price should be rounded up rather than down.

Nonsense. The original poster (OP) clearly stated they can spend a total of €150,000 (about $163,000) for land acquisition all-inclusive. Therefore, they have to buy the equivalent of a Porsche with a turbo (south-facing plot), which unfortunately has significant rear damage (small garden or only usable with additional capital investment), and it’s not even certain whether this damage can be fully repaired (there’s a residual risk that the garden remains as is and the land value won’t be increased by leveling the plot). So they need to buy well below market value. Otherwise, that “Porsche” plot could end up financially ruining them – which has happened before.

If the seller prices the property significantly higher, no quick agreement will be reached, regardless of market value or whether the seller’s price is realistic. Then the OP will have to look for a different “vehicle” – for example, a Golf Plus priced at €130,000 (about $141,000) with a north-facing location, but undamaged and ready to move into immediately.

Is the principle clear?

The plots are naturally smaller, so someone can actually afford them. €130,000 is still a lot for the plot.

Please take a look at a land value map for North Rhine-Westphalia (NRW). Everything west of Wickede generally commands over €150/m² (about $140/ft²), even in some very old development areas. In the Ruhr region or the Leverkusen/Cologne area, commercial land plots (!) regularly go for over €100/m² (about $93/ft²). Comparing that ten times over to your meadow in Schleswig-Holstein (SH) makes no sense – none whatsoever.

I once calculated that paying €10,000 more for the land would save 4 km (2.5 miles) of commute over 20 years.

That’s understandable, but people don’t just commute to work, and usually work longer than 20 years. If both partners are employed, the calculation for the greenfield plot becomes even less favorable.

So, if I pay €50,000 more for the land but save 20 km (12 miles) of commute, I come out roughly even. That justifies expensive plots. Cheap land in the middle of nowhere with a 30 km (19 miles) commute is basically worthless. The money spent on commuting is lost, whereas the high land cost remains (unless the area becomes worthless because of something like airport noise or all major companies moving away).

Exactly. By the way, in SH you run a much higher risk of your neighborhood losing value in 30 years than in NRW, where the price is about €350/m² (about $33/ft²).

Still, it’s supply and demand. If every “middle-class employee”

Baseless assumption. €350/m² (about $33/ft²) is already at the upper limit even for NRW and major metro areas. I neither know the OP’s income, job situation, nor family or financial circumstances well enough to make such a statement about them, let alone generalize it.

to pay €350 per square meter, income must be better there. Here we cannot afford a €130,000 net plot (net = excluding incidental costs, but including VAT) and we paid just under €63,000 net, which is already well into the upper middle range because the location and position are very decent.

Your location is neither decent nor remotely comparable to the OP’s. That can be said confidently without even knowing your plot. To find a comparable location in SH for around €350/m² (about $33/ft²), you’d need to look in Lübeck, Kiel, Sylt, or north of Hamburg. Your location is miles away from that – geographically and certainly in terms of infrastructure.

As I said, high prices per square meter are advantageous because the value doesn’t diminish, and you get a “return” for it (e.g., central location, short commute, major industry nearby, or similar), making it easier to sell the house later.

Also, you can get a better (higher) mortgage loan and, if necessary, sell with a profit after 30 years even if the mortgage isn’t fully paid off. But to understand that, you need to mentally detach from the greenfield mindset.

Best regards,
Dirk Grafe