Build or wait a little longer?

I would take a look at houses and talk to some providers on the market. Then you will probably get a better feeling for what you want and where the price range is heading. Until your construction project really starts, certainly one and a half years will pass. In the meantime, just continue to save diligently.

In 2-3 years, children might come into play, and they don’t exactly make the building process easier.

I would try to keep the apartment.

Hello,

thank you for your answers.
Unfortunately, we cannot and do not want to wait another 5 years. That is basically a fact for us. On the one hand, there is a construction obligation on the property for 3 years, so we would have to start at the latest the year after next, and on the other hand, it would very likely conflict with our family planning. Sure, you could still sell the property and move into a family-friendly apartment for the time being, but that would break our hearts as we do not expect to get a new plot there that quickly again. So the question relates to the next 2 years. If I read between the lines here, most people speculate that the shock with rising construction prices must end "soon" (maybe in 5 years – by the way, I also believe that – but rather that prices will stagnate instead of falling), but this will probably not happen next year and they will most likely continue to rise there.

What we absolutely want to avoid, of course, is later being one of the "fools" who built a house at completely inflated prices virtually without equity that will be worth significantly less in 5 years. And then, in the worst case, having to sell the house for some reason and not getting anywhere near back the money spent.

How strongly would you assess this risk?

Regarding the condominium: It is not in the home village but in the larger nearby city (85,000 inhabitants). Very central and well located (shopping street, kindergarten, primary school right within walking distance), where the m² prices are >270€/m². I can estimate the rent very well because I know how much my neighbor pays for rent who lives in the practically identical but mirrored apartment.
Therefore, I definitely tend to rent out the apartment first. Due to the speculation tax, I could not really sell it for more anyway, at least not yet. And through the interest I pay, I also get a good amount of tax back from the rental income. We would keep the 20k€ we currently have as a safety cushion.

Regarding the construction project:
Solid house with clinker brick (without basement)
It does not have to be KfW 55 or 40Plus or similar.
Gable roof with 1x or 2x bay window
140-150 m²
Carport instead of double garage
Outdoor facilities to be created. (Paving and lawn first)

As a "treat," we would like a few floor-to-ceiling windows and the façade to be designed somewhat unusually. (Projecting bay window or similar things)

If we subtract the land, we would have 410k€ as a budget for the house including incidental costs and outdoor facilities by the end of the year out of 480k€.
Is it currently really very difficult to build a house with the above requirements for this budget?
Then I am even more shocked than I already was ...

You don’t need a new property for a newborn. They’ll sleep in the parents’ bedroom anyway. But some people do buy a new minivan right after a positive pregnancy test.

In terms of liquidity, you can build short-term. 100% financing is available in plenty, you know that yourself.
However, by committing to building, you have put a gun to your own head, which makes the project unnecessarily expensive. High borrowing means higher interest rates. With the amount needed, that’s many thousands of euros in interest you will have to bear due to lack of equity.
Then there’s the recently purchased apartment. I would have the prepayment penalty calculated. After such a short period, that will probably be a five-figure sum. What a shame.
I wouldn’t rent it out just because the opportunity arises. I would only ever do that out of conviction, otherwise it won’t make you happy. The subject is a bit more complex than the simplistic calculation rent = monthly installment.
On the other hand, the apartment also holds an opportunity – maybe you can sell it for a profit.

What we absolutely want to avoid, of course, is being one of the "fools" later who built a house with completely inflated prices basically without equity that is then worth significantly less in 5 years.

Don’t worry. You’re already one of the "fools" who financed 100% for an apartment you no longer want two years later That’s life.

410k€ as a budget for the house including ancillary costs and systems.
Is it really very difficult right now to build a house with the above requirements within this budget?

No, it’s possible in NRW, especially if it’s a bit more rural (Rheine).

With your income, you can definitely build with 100% financing as long as you don't spend the money on cars, vacations, luxury, etc. But your text reads reasonably, so it works exceptionally even without equity.

I would first keep the apartment and only sell if your construction costs explode.

Parental leave should not be a problem with parental allowance and over 4k on your part, just like your wife's return to work (part-time).

The question remains how expensive the house will really be and whether the total installment remains manageable. Everything will work out for you.

if I HAD to bet, I would bet on a fall in prices within the next 3-5 years.

I would bet against that, think further:

...so that the rabble brings the (borrowed) money to the people. At the same time, companies rake it in like never before. At some point, that will come to an end.

What do the companies and their employees do with the "raked-in" money? Right, in turn they bring it to the people: buy expensive company cars, hire more employees, invest, and pay higher salaries. The money does not stay stuck in the company forever. And even if the CEO buys 2 new Porsches. Then the Porsche salesman and the engineers in Zupfkuchenhausen can finally buy a house. It is an eternal cycle that does not end, the spiral keeps turning upwards.

The spiral breaks as soon as interest rates rise. Then the mass of people can no longer afford today's prices because you get a lower loan amount for the same monthly payment.