Buying land versus the current situation

Hello everyone
I am reaching out to you experienced people, experts, and idea holders about my current state of mind :)
After a very long search, we as a family (2 adults + 2 children) have found a really nice plot of land in a proper small town and secured its buildability through a building inquiry (it had not been built on for a long time). We have been talking and negotiating with the current owner for almost two years to now have a final offer.
The notary appointment is scheduled for November – until then I of course need to clarify the financing.
In my opinion, the purchase price (without taking into account the current geopolitical situation) is fair. We are at just over €120k for 3900 sqm – a very large piece of land, I know, about 1000 sqm of which is building land. Until recently, I thought: "you can’t go wrong", just buy first and let the situation recover and especially watch that construction and material costs normalize again – we basically have no time pressure, it could also take 2 or 3 years, so I have plenty of time to plan. Until now, I was also convinced for a long time that even if we do not build on this piece (because we find something else or eventually decide against a house of our own), we could at least get back the same price (plus the costs I have now (notary etc.) for sure.
However, I am now unfortunately doubting this "security" – what if the market for "building" remains so catastrophic and suffers such severe damage for years/decades that nobody wants or can build anymore? After all, it became clear even before the energy crisis, yes even before the war started, that new buildings in Germany are politically no longer wanted. Then we would be stuck with the plot, unable to sell it or even make a heavy loss.
Mutual logic: the additional costs for "normal" rental arrangements remain so extreme that energy-efficient building does indeed pay off (the location is very well suited for this), and so this property would become an absolute prime piece for people who want to leave the city and at the same time no longer want exploding incidental costs – I assume that the many old buildings and renovated old buildings in the big cities near us (especially Dresden 30km away) will need decades to become at least somewhat energy efficient. Rents will not get cheaper either. Therefore, new construction in this region could very well still be worthwhile (provided politics "calm down" again).
Or the economic system takes even more damage so that in the future only a fraction will be able to afford building at all. Will we then find a new buyer for our plot? But in inflation or a weakening Euro, a hard asset is always better than cash....
The currently offered installments (just under €600 monthly, 4.8% interest, 5 years fixed) we can afford very well, we are both in relatively "secure" positions/jobs. The 5 years are especially good for us because then, if we haven’t built by then, we will seriously discuss whether we even want to build at all or change direction. Then we could at least manage the plot well from a credit perspective....
To be honest, I am actually totally unsettled....Does anyone have a helpful thought? :)
Many thanks
Toni

After a very long search, we as a family (2 adults + 2 children) found a really nice plot of land in a really small town and secured its buildability through a building inquiry (it had not been built on for a long time). We talked and negotiated with the current owner for almost two years to now have a final offer.

The patience and effort put into the negotiations alone indicate that – absolutely speaking, small town or not – this would be a relatively specific and sensible option for your family to settle there. I wouldn’t waste a single thought on betting my luck or misfortune with the economy (mis)assessments, but rather just simply build my house. A property is, as our Austrian neighbors so nicely say, a "reality" – without trying to test your age with the detergent slogan, "you know what you’ve got."

I can't quite follow. The property is dirt cheap and you can afford it. I would definitely buy it. Some of your arguments I don't understand. For example, that single-family houses are no longer politically desired will presumably lead to no new development areas being designated for them, and your buildable plot will become correspondingly much more valuable. It all sounds like pretty unnecessary worries.

what if the market for "building" remains so catastrophic and suffers such severe damage for years/decades that no one wants/can build anymore? After all, it was already becoming clear even before the energy crisis, yes even before the war began, that new constructions are politically no longer desired in Germany.

I can somewhat understand the thought, but I don’t see it so negatively. Sure, everything is a bit uncertain… but if it doesn’t come to the worst case (then everything doesn’t matter anyway), then everything will more or less regulate itself again. Energy prices will not go down, but in the next few years, there will be a catch-up, so that photovoltaics, self-sufficiency etc. will be normal for new builders. Construction prices will also not go down, but probably the supply chain will be stable again, so that some prices will feel reasonable again. The problem I see is more natural disturbances and social politics. We won’t get nature under control. Socially, we will also get an even greater grievance. But this affects less those who can afford to build. The freedom of childhood and consequently the freedom of the generation that then grows up or has grown up, has long since ceased to exist. You probably already belong to this generation without knowing it ;) Have you ever talked to your (great-)grandma about what she experienced?

I would buy it too. Construction has always continued, even in the most difficult times. And it will always continue. From my point of view, it will be different than in recent years. It will be built smaller, with less luxury and more own contribution. When the supply chains work again in 1 or 2 years and prices stabilize, it may also become a bit easier.

I can somewhat understand the thought, but I don’t see it so negatively. Sure, everything is a bit uncertain… but if it doesn’t come to the worst case (then everything doesn’t matter anyway), then everything will more or less regulate itself again. Energy prices won’t go down, but in the next few years there will be catch-up, so that photovoltaics, self-sufficiency, etc. will be normal for new builders. Construction prices won’t go down either, but the supply chain will probably be stable again, so some prices will feel reasonable again. The problem I see is rather natural disturbances and social politics. We won’t get nature under control. Socially, we will also have an even bigger grievance. But this affects less those who can afford to build. The freedom of childhood and consequently the freedom of the generation that grows up or has grown up no longer exists. You probably already belong to this generation without knowing it ;) Have you ever talked to your (great-)grandma about what she experienced?

I’m stunned at how confidently throws out a few theses here, presented as sure to come true in their multitude. Amazing! Why don’t you pull out your crystal ball for other areas too? ;) :D P.S. I’m totally with you, that’s exactly how I see everything coming :oops: P.P.S. We definitely have to meet for a wine sometime ;) To the OP: Buy!