Hello everyone,
I don’t have a specific question but rather hope to spark a discussion and gather different opinions about homebuilding in the future...
Personally, I am planning to build a prefabricated single-family house in the Hannover region in about 2-5 years. Until then, I will save up equity and hope that affordable plots of land—or any plots at all—will become available. At the moment, the options in the areas I’m looking at are quite limited.
I have a flexible timeline for building, meaning I don’t urgently need a house in the next few years. But if the conditions are favorable, I would take advantage of that because I want to have a house for my older age anyway. Having children with my partner is not expected until 5-8 years from now.
I assume that building has also become significantly more expensive due to the huge price increases in recent years. Various statistics indicate cost increases of 2-4% per year.
After the current construction boom—which will likely continue for some time—can we expect more affordable prices again or bigger discounts when contractors’ schedules are less full?
Is building perhaps already cheaper than buying a young existing single-family house?
If interest rates rise in the coming years, what would be the consequences?
I’d appreciate hearing some opinions on this topic, especially whether it would be wise to wait before starting construction, as long as the situation allows.
Best regards
I don’t have a specific question but rather hope to spark a discussion and gather different opinions about homebuilding in the future...
Personally, I am planning to build a prefabricated single-family house in the Hannover region in about 2-5 years. Until then, I will save up equity and hope that affordable plots of land—or any plots at all—will become available. At the moment, the options in the areas I’m looking at are quite limited.
I have a flexible timeline for building, meaning I don’t urgently need a house in the next few years. But if the conditions are favorable, I would take advantage of that because I want to have a house for my older age anyway. Having children with my partner is not expected until 5-8 years from now.
I assume that building has also become significantly more expensive due to the huge price increases in recent years. Various statistics indicate cost increases of 2-4% per year.
After the current construction boom—which will likely continue for some time—can we expect more affordable prices again or bigger discounts when contractors’ schedules are less full?
Is building perhaps already cheaper than buying a young existing single-family house?
If interest rates rise in the coming years, what would be the consequences?
I’d appreciate hearing some opinions on this topic, especially whether it would be wise to wait before starting construction, as long as the situation allows.
Best regards
haydee schrieb:
There is a lot of construction happening in the Hanover region right now. Maybe in 3 to 6 years there will be some nearly new houses on the real estate market at reasonable prices As long as the number of years until the property bubble possibly bursts is longer than the number of years a builder is willing to wait patiently, land will continue to be sought after and developed.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Two years ago, we also bought a property in the Hannover area. This was already during the “peak level.” This means that prices have remained stable since then and have not dropped by a single cent so far. However, it is a small town. At the moment, I don’t see prices balancing out as long as the economic situation in the region remains good. In my opinion, Hannover started from a relatively low price level even 10 years ago. In Hannover itself, prices for existing properties continue to rise significantly, and I don’t see an end to this trend yet. If we hadn’t specifically wanted a house, it would definitely have been more economical to buy a condominium (apartment) in a good urban location and then move “out to the countryside” in 10-15 years. Building a house was also an option, but the prices were simply too high as construction companies had full order books. The land prices were actually okay, but the plots themselves were poor. Therefore, waiting for a new development area could actually be an option, provided the land prices are reasonable then. However, when I look at the prices that were being asked for in Seelze (northeast of Hannover, very close to Hannover, but a terrible micro-location with almost nothing within walking distance), I have some doubts.
We also considered your points because:
- Low interest rates
- Rapidly rising prices
Our disadvantage compared to you was that we were already in our mid to early 30s, so the time available for repayment is limited. Also, we paid nearly €800 (about $860) in cold rent (rent excluding utilities), which obviously did not cover the repayment but was still capital gone monthly.
In the end, we decided to buy because I don’t believe the bubble will burst within the next 10 years. Sure, some may have calculated so tightly that refinancing will become difficult, but I don’t expect a dramatic rise in interest rates. Since many financed a significant part through KfW loans (government-backed development bank loans), I don’t believe the government will just abandon these borrowers. After all, there are quite a lot of them, and the offered contract model was/ is quite rigid (only 10 years fixed interest rate, fixed repayment rates, etc.). The few properties that come onto the market this way will surely find buyers without problems.
Another consideration was: If those houses that were priced at the very limit come onto the market cheaply, do we even want them? Do I want a 140m² (about 1,500 sq ft) house with 3 kids’ rooms in minimal finish? Of course, if you want to save money, compromises are necessary, but such “tight” financing is rarely available for a 200m² (about 2,150 sq ft) mansion. That means I would be buying a relatively small house that was tailored to the needs of the previous owners. They don’t have to meet my requirements.
We now have 200m² (about 2,150 sq ft), and we are very happy with it. If we had planned the house ourselves, the layout would certainly have been different, and we could have achieved the same living comfort on 165-170m² (about 1,780-1,830 sq ft), but that’s how it goes. On the other hand, it’s not a cookie-cutter house of today’s standards (with 140m² there aren’t many options for customization), and we can gradually implement our own ideas.
We also considered your points because:
- Low interest rates
- Rapidly rising prices
Our disadvantage compared to you was that we were already in our mid to early 30s, so the time available for repayment is limited. Also, we paid nearly €800 (about $860) in cold rent (rent excluding utilities), which obviously did not cover the repayment but was still capital gone monthly.
In the end, we decided to buy because I don’t believe the bubble will burst within the next 10 years. Sure, some may have calculated so tightly that refinancing will become difficult, but I don’t expect a dramatic rise in interest rates. Since many financed a significant part through KfW loans (government-backed development bank loans), I don’t believe the government will just abandon these borrowers. After all, there are quite a lot of them, and the offered contract model was/ is quite rigid (only 10 years fixed interest rate, fixed repayment rates, etc.). The few properties that come onto the market this way will surely find buyers without problems.
Another consideration was: If those houses that were priced at the very limit come onto the market cheaply, do we even want them? Do I want a 140m² (about 1,500 sq ft) house with 3 kids’ rooms in minimal finish? Of course, if you want to save money, compromises are necessary, but such “tight” financing is rarely available for a 200m² (about 2,150 sq ft) mansion. That means I would be buying a relatively small house that was tailored to the needs of the previous owners. They don’t have to meet my requirements.
We now have 200m² (about 2,150 sq ft), and we are very happy with it. If we had planned the house ourselves, the layout would certainly have been different, and we could have achieved the same living comfort on 165-170m² (about 1,780-1,830 sq ft), but that’s how it goes. On the other hand, it’s not a cookie-cutter house of today’s standards (with 140m² there aren’t many options for customization), and we can gradually implement our own ideas.
86bibo schrieb:
but a disastrous micro-location, as basically nothing is within walking distance), This is actually a very important point, even though it is often overlooked: what good are wide doors and having planned for a stairlift in old age if I need to take a taxi to the neighboring town just to buy bread.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
B
Bieber081531 Jan 2018 13:58In Seelze, many places can be reached on foot ... (including an S-Bahn train station, shopping facilities, an elementary school, ...). It may be that there are addresses in Seelze where this is more difficult, but compared to other locations, it still seems quite attractive to me.
In general, though, I agree with you: location, location, location.
In general, though, I agree with you: location, location, location.
H
HilfeHilfe31 Jan 2018 18:4086bibo schrieb:
We also bought a property near Hannover two years ago. That was already during the peak market phase. This means that prices have basically remained stable since then, but haven’t dropped even a cent so far. However, it’s a small town. Currently, I don’t see prices balancing out as long as the regional economy remains strong. In my opinion, Hannover started from a relatively low level about 10 years ago. In Hannover itself, prices for existing homes are still rising significantly, and I don’t see an end to that anytime soon. If we hadn’t specifically wanted a house, it probably would have been more economical to buy a condominium in a good urban location and then move “out to the countryside” in 10-15 years. Building a house was also an option, but prices were just too inflated because contractors’ schedules were completely full. The land prices were actually okay, but the plots themselves were poor quality. So it might really be an option to wait for a new development, provided the land prices are reasonable then. However, when I look at the prices asked for in Seelze (northeast of Hannover, very close to the city but a terrible micro-location because basically nothing is within walking distance), I have some doubts.
We also considered your point because:
- Low interest rates
- Rapidly rising prices
Our disadvantage compared to you was that we were already in our mid- or early 30s, so the time available to pay off the loan was limited. Also, we paid nearly €800 cold rent (excluded utilities), which of course didn’t cover the loan repayment, but it was still capital going out monthly.
We decided to buy because, in the end, I don’t believe the bubble will burst within the next 10 years. Sure, some probably stretched their budgets so tight that refinancing might become difficult, but I don’t expect a dramatic interest rate increase. Also, since many financed a significant part via KfW loans, I don’t expect our government to simply abandon these borrowers. After all, that’s a huge number of people, and the contract model offered was/has been quite rigid (only a 10-year fixed interest period, fixed repayment rates, etc.). The few properties that might come onto the market this way will surely find buyers without problems.
Another consideration was: If the houses that were budgeted as a last-minute calculation do come onto the market cheaply, do we even want them? Do I want a 140m² (1507 sq ft) house with 3 child bedrooms at minimal finish? Of course, if you want to save money, compromises have to be made, but such tight financing rarely happens for a 200m² (2153 sq ft) “palace.” So I would be buying a relatively small house that’s tailored to the previous owners’ needs. They don’t have to fit mine.
We now have 200m² (2153 sq ft), which we are very happy with. If we had planned the house ourselves, the layout would definitely have been different, and we could have achieved the same living comfort on 165-170m² (1776-1830 sq ft) without any problems, but that’s just how it is. On the other hand, it’s not a cookie-cutter house of today’s standard (with 140m²/1507 sq ft, there aren’t many options for customization), and we can gradually implement our ideas over time.