ᐅ Current Situation of the Construction Industry in the Rhine-Main Region
Created on: 13 Jan 2018 15:16
W
Wolf22
Hello everyone,
Now that we have a final financing commitment and will have our plot officially certified on Tuesday, I am a bit uncertain about some statements from my architect. He mentioned that due to the current strong construction boom, prices for new builds are rising sharply, and it is becoming difficult to find contractors and tradespeople. Therefore, we should expect significantly higher costs and a longer construction period of up to 1.5 years. Currently, tenders for individual trades are hardly being processed, and the few available contractors in the market are mostly interested in multi-family housing projects because of the effort involved.
Is there anyone here from FFM who is currently building with an independent architect?
Thanks for your responses
Now that we have a final financing commitment and will have our plot officially certified on Tuesday, I am a bit uncertain about some statements from my architect. He mentioned that due to the current strong construction boom, prices for new builds are rising sharply, and it is becoming difficult to find contractors and tradespeople. Therefore, we should expect significantly higher costs and a longer construction period of up to 1.5 years. Currently, tenders for individual trades are hardly being processed, and the few available contractors in the market are mostly interested in multi-family housing projects because of the effort involved.
Is there anyone here from FFM who is currently building with an independent architect?
Thanks for your responses
H
HilfeHilfe14 Jan 2018 11:39Hello,
it’s quite bold to secure a financing commitment (i.e., loan approval?) when you already know that prices are rising.
Do you have enough equity to cover the construction period interest, double financial burden (rent), and increasing costs if necessary?
For these reasons, we were better off agreeing on a fixed price with the developer. They really pushed ahead.
it’s quite bold to secure a financing commitment (i.e., loan approval?) when you already know that prices are rising.
Do you have enough equity to cover the construction period interest, double financial burden (rent), and increasing costs if necessary?
For these reasons, we were better off agreeing on a fixed price with the developer. They really pushed ahead.
@Zaba12: In the architect contract, you can clearly define the start of construction as well as the completion deadline to avoid unpleasant surprises. But the architect has to agree to that as well.
In my opinion, prices increase every year (also with a general contractor or developer), so why wouldn’t that affect an architect?
And if the architect’s cost estimate is similar to that of a general contractor, why should there be any issues with the bank? You might even use the same floor plan. It always depends on when you part ways with the architect, doesn’t it?
In my opinion, prices increase every year (also with a general contractor or developer), so why wouldn’t that affect an architect?
And if the architect’s cost estimate is similar to that of a general contractor, why should there be any issues with the bank? You might even use the same floor plan. It always depends on when you part ways with the architect, doesn’t it?
Turnkey contractors and prefab home companies offer fixed prices. That way, you know exactly what to expect. Our house cost 163,000 and that was the final price. Additional costs like extra earthworks, utility connections, temporary power and water, etc., were also quoted as fixed prices. The garage was included in that as well. I knew, and so did the bank, that the total cost of the house was 195,000 and nothing more. Then you add the garden and utilities, permits and paperwork, kitchen, painting, some lighting, flooring... Total house price was 220,000, the land was paid off, equity was 130,000, so with a small buffer that left a loan of 100,000.
That’s how secure financing should work. If it doesn’t work with architects, it’s time to pull the plug. Don’t take any risks. Karsten
That’s how secure financing should work. If it doesn’t work with architects, it’s time to pull the plug. Don’t take any risks. Karsten
Skilled tradespeople are in short supply. Everything our general contractor orders works fine, although they also face challenges. The tradespeople choose their clients. Everything we directly commission, for example, the garage installation, is pending. We urgently need a roofer. Although I don’t live in the area you mentioned, the companies we work with have always operated in Frankfurt or Munich.
@haydee: But an architect doesn’t just work on one project; they need contractors not only for one building project but also for other projects nearby. If contractors have already worked with them several times, why would they turn them down? Of course, if their schedules are completely full, that’s different, but in general, I don’t think you can say that before you’ve advertised the trades.
And if you’re searching for a contractor yourself, it’s clear that it takes much longer—because in this case, it’s a one-off situation.
There are also people who have the architect plan everything but want to save costs by tendering the trades themselves, and then wonder why no one responds or why the prices are unrealistically high.
And if you’re searching for a contractor yourself, it’s clear that it takes much longer—because in this case, it’s a one-off situation.
There are also people who have the architect plan everything but want to save costs by tendering the trades themselves, and then wonder why no one responds or why the prices are unrealistically high.
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