Construction costs are currently skyrocketing

Oh, as a builder you can have the same problem. For us, the development of the area took a whopping 10 months, but the communication was rather optimistic, and some had signed their contracts based on the municipality's statements. However, those who are actually building now are the lucky ones. The rest were overwhelmed by rising construction costs and interest rates. They are likely no longer able to afford the construction in the foreseeable future.

I find that incredibly sad and I really feel sorry for the people. You look forward to the new house and plan your life with children, job – the new house as a "center of life" is partly based on that. When after 1-2 years the realization comes that you have to bury this dream because of factors you simply have no influence over, I find that truly tragic.

But - to get back to the topic - with all that there were no price increases from the general contractor. We are still paying the prices from 11/2020.

And all without any issues? I had closed in January '21 and of course, with the delays, I immediately lost the warranty. Meanwhile, the KfW also changed its definition of "start of the project," so in October we made a new contract with a fairly fair surcharge of 1500€ for the carpenter. Recently, he started complaining about how much more expensive everything is and that he doesn’t know if he can keep the price. He blames the delay in the development, which is not entirely incorrect. But in my opinion, these delays are covered by the increase last October. I’m curious to see how this turns out...

When after 1-2 years the realization comes that you have to bury this dream because of factors you simply have no influence on, I find that really tragic.

Yes, but that also shows how dangerous waiting as a solution is. In ’21 everyone thought it would definitely normalize soon. Then interest rates rose a bit in the winter, and questions came up about when they would normalize again. And now we are above 4% and it won’t get better for the time being.

The rest was overwhelmed by rising construction costs and interest rates.

We are definitely still worried about that. In the draft contract we have, there are no significant limitations on the fixed price. And the BT has assured us about 20 times that it will stay that way and that the price will remain the same for us. But in the end, we still don’t have a contract with the BT, and that is simply making us nervous. Actually, we were supposed to receive the contract from the notary this week, but then there was (allegedly just) a minor issue that still needed to be adjusted :rolleyes: Now the call-off period for the financing is starting to tick for us (during which we had actually hoped to finalize the notarization with the BT as well). But since we still don’t have anything here and there is a mandatory 14-day cooling-off period for consumer protection reasons before the notary appointment, that won’t work out. We are now hoping to at least have the contract during the call-off period here, even if it won’t be notarized. If that doesn’t happen either, it’s pretty shitty. Calling off the financing at the latest possible time? That would probably mean having to completely write off the project for now, or we would have to take on a much higher risk with a new financing deal. Or do we trust the BT to keep his promises? That somehow just seems naive in the current global situation. I mean, well, in the worst case of “keeping the financing,” we would still have the option to switch the mortgaged property, but that would have to be found first. Sigh… it would have fit so well if it hadn’t been delayed again. I think we would also be much more relaxed if interest rates and construction prices weren’t so extremely volatile right now (at the moment especially interest rates).

Yes, but that also shows how dangerous waiting it out as a solution is. In '21 everyone thought it would surely normalize again soon. Then interest rates rose a bit in the winter and questions came up here about when they would normalize again. And now we are just above 4% and it won’t get better for the time being

Sure, but you also have to say: that a war in Europe followed directly after the Corona crisis—no one could really have anticipated that. Hindsight is always 20/20, but to say during Corona that we’d wait another year until everything somewhat normalizes (which I would have assumed if we didn’t have the war now) isn’t entirely unreasonable.

Of course, no one could have simply guessed that. But on the other hand, there have been historically enough examples where several crises occur simultaneously. People just easily forget what has happened before and what can happen. Regarding this topic, I can recommend the books by Nassim Taleb.

Unfortunately, not every (potential) homebuilder fully considers world events. That interest rates run away in a few weeks and prices have been exploding for two and a half years is indeed a special (in a negative sense) situation. Especially the generation that is currently building mostly is no longer accustomed to real crises.