Construction costs are currently skyrocketing

I forgot to mention that I meant a semi-detached house. And I find 4500€ per square meter already very expensive for that. And regarding the topic that being allowed to build in [2019] should also be seen as a privilege, I would like to point out that with hard work you can afford something.

I forgot to mention that I meant a semi-detached house. And for that, I already find €4500 per sqm very expensive.

Once again for you. A house is a house. It costs roughly the same everywhere in Germany. The location and thus the price of the land makes the difference. The difference between a semi-detached house and a detached single-family house is often just about 100 sqm of land. That makes the semi-detached house cheaper overall. €4,500/sqm says absolutely nothing. My car costs €50,000 – is that expensive or cheap for a car? I wish I could buy a new build for such a price where I live. Unfortunately, then only a tiny house or a shed would remain as a new build. I fear that in most regions of Thuringia, people would throw up if houses were that expensive.

And on the subject that it was a privilege to be allowed to build in Bergreifen even in 2019, I would like to note that with hard work you can afford something.

Well, that was true in 1920. In 1983 too. And besides 2019, it also applies today. But after 10 years of only falling interest rates (I even took out construction financing with negative interest rates – as a banker, not as a customer), no one is used to money having a price anymore and having to sacrifice something in order to afford something. Hard work, sacrifice, etc. – simply was not necessary in the last 10 years.

The house one street over from the same developer costs a slim 50% more.

We sold our former house for 388,000 without a realtor in October 2020. The buyers and current owners have to move for professional reasons and offered it online through a realtor for 639,000 euros about 4-5 weeks ago. Out of curiosity, I naturally check occasionally and recently saw it listed for 599,000 and now for 549,000. I am curious how much the house is worth today.

How is life in the new house?

Well, that was the case in 1920. In 1983 too. And besides 2019, it still applies today. But after 10 years of only falling interest rates (I even completed mortgage loans with negative interest rates - as a banker, not as a customer) no one is used to money having a price and having to sacrifice something in order to afford something. Hard work, sacrifice, etc. - simply wasn't necessary in the last 10 years.

Of course, falling interest rates have enabled many people to get into homeownership, but this is very important: Even though construction prices were still somewhat normal in 2019, land prices had long since been beyond reason. For the older generation, prices increased from €30 per sqm in 1980 to €240 per sqm in 2020 at the same location, an eightfold increase. Just imagine that. Within 40 years you go from having to spend €21,000 to €168,000 for a 700 sqm plot. Then low interest rates don’t help much anymore. But yes, more people could still build today through their own labor. But nobody wants that anymore.

In our area, land prices have more than doubled within 7 years. We paid 110€/sqm back then, currently the price is 240€/sqm. We were damn lucky to have built in 2016 at exactly the right time. The land was cheap, construction prices much lower, and interest rates at rock bottom. We had construction costs of 1,750€/sqm including all incidental building costs excluding land. Currently unthinkable :(