Construction costs are currently skyrocketing

Today is a good day to report that the first part of my photovoltaic system has been installed: 10.2kWp - 24 modules (roof at 25 degrees facing south). WR and 9.6 kW battery will come later. Complete (including all small parts, installation/labor, registration etc.pp) 19k euros

Above: Homeownership rate in Germany over time until 2018. The figures for 2022 can be viewed on Statista. Survey conducted every 4 years.

I leave it uncommented for interpretation as to which government or which events could have led to what and when.

Fun fact: Switzerland has a lower homeownership rate in all areas.

Above is the home ownership rate in Germany over time until 2018. The figures for 2022 can be viewed on Statista. Survey every 4 years.

I leave it uncommented for interpretation as to which government or which events may have led to what at which time.

Fun fact: Switzerland has a lower home ownership rate in all areas.

I interpret this to mean that the low interest rate period was a good opportunity to acquire property, provided one had equity. At the same time, safe investments no longer yielded returns.

This causes prices to rise, which in turn means that young people without equity have (even) less chance of acquiring property.

And all those who bought/built at the low interest rates up until a year ago are also the winners. What did I have to listen to in 2019. The prices were said to be so high and expensive. And today? The house a street away from the same developer costs a slim 50% more. Where in 2019 we paid 3000€ per sqm (house with land) for 1% interest in the building area, now you’re at 4500€ per sqm. I just say, have fun building. No wonder no one buys anymore. We couldn’t afford the property today either, but in 2019 everyone was still groaning and complaining about the supposedly expensive prices. Whoever didn’t buy then really has only themselves to blame.

And all those who bought/built at the low interest rates until a year ago are also the winners. What did I have to listen to in 2019. The prices were said to be so high and expensive. And today? The house one street away from the same developer now costs a flat 50% more. Where in 2019 in our area you paid 3000€ per sqm (house with land) for 1% interest, now you are looking at 4500€ per sqm. Good luck building, I say. No wonder no one buys anymore. We ourselves couldn't afford the property anymore today either, but in 2019 everyone was still groaning and complaining about the supposedly expensive prices. Whoever didn't buy then really has only themselves to blame.

What do you mean by "only themselves to blame"? Anyone who could pay 3000 euros per sqm in 2019 was already privileged back then.

What did I have to listen to in 2019. The prices were supposedly so high and expensive. And today? The house one street away from the same developer suddenly costs a slim 50% more. Where in 2019 you paid 3000€ per sqm (house with land) for 1% interest in the development area, you now pay 4500€ per sqm. Good luck building, I say. No wonder no one buys anymore.

I have been involved for 30 years. Every year people complain about how expensive building has become. Meanwhile, the relative possibilities to build/buy have improved year by year. Only in recent years has it become more difficult – but still very affordable. Do we now also complain that TV used to cost 20DM broadcasting fees, but today you pay 150€+X for all kinds of streaming providers? Give up luxury in life and spend your money on property. Then it will work easily. Apart from that, please calculate only and exclusively with sqm prices for condominiums. House prices according to construction costs per sqm plus land, because there is an enormous leverage in the land. Whether I need land at 25€/sqm hanging dead over the fence in the East or at 4,000€/sqm in the Munich catchment area is a huge difference. If you now get a house for 4,500€/sqm including land, then that is a well affordable thing. Well planned 120 sqm is enough for a family with one child (even with two children). That makes €540k. Equity has always been necessary and so it is today. So, 20-25% equity = financing need between €400k and €450k. Currently, with 1% repayment (young people and slightly higher interest rates do not need more) and to keep calculations simple with an annuity of 5%, this results in a burden of €1,650-1,900. He earns €3,000, she €1,800 + child benefit €500 = €5,300 net per month. That leaves about €3,500 for ancillary house costs and living expenses. If that no longer works, then I don’t know either. A completely normal average family. And even with higher financing or less income, it is still manageable. Because an apartment with 120 sqm and €10 cold rent (which is partly below social rent in big cities) already costs €1,200. Renting a house in cities that are at least not only surrounded by blossoming landscapes starts at €1,500 cold as entry level. And I don’t see average families having to live on the street.