Construction costs are currently skyrocketing

For the older generation, prices increased eightfold at the same location, from 30€ per sqm in 1980 to 240€ per sqm in 2020. Just imagine that. Having to spend 168,000€ instead of 21,000€ for a 700sqm plot within 40 years. Low interest rates don’t help that much anymore.

Well.
In 1980, the mortgage interest rate was around 10%. So, with full financing, 2,100€ had to be paid annually in interest at first.
In 2020, the mortgage interest rate was around 1%. So, with full financing, 1,680€ had to be paid annually in interest at first.

Just imagine that. In 2020, one could buy + finance more cheaply than in 1980. And that with an average income that was two to three times higher.

So much for your statement.

Well. In 1980, the construction financing interest rate was around 10%. So with full financing, 2,100€ had to be paid annually in interest at first. In 2020, the construction financing interest rate was around 1%. So with full financing, 1,680€ had to be paid annually in interest at first. Just imagine that. In 2020, you could buy + finance more cheaply than in 1980. And that with double to triple the average salary. So much for your statement.

Nonsense. If the land was equity and the house was self-built over several years back then, it was of course cheaper than today. But today, turnkey (preferably even with flooring/painting) is more expensive for most people because they no longer want to get their hands dirty themselves.

You have to imagine that. Within 40 years, instead of having to pay 21,000€ you now have to pay 168,000€ for a 700sqm plot of land. Then low interest rates don’t help that much anymore.

Yep, my parents-in-law financed at 8%, but looking at the purchase price, it was still a good deal.

Well, here the price per square meter is consistently above 2k/m² and the terraced houses, like the ones they have (1980/90, district heating), are sold for 1.1-1.2M.

But yes, through own labor even more people could build today. But nobody wants that anymore.

The last time I suggested “own labor” here, I was told to build a “mud hut” and other things. Well, those who don’t want to, already have it.

One has to imagine that. In 2020 you could buy + finance cheaper than in 1980. And that even with double to triple the average salary.

That is of course correct in this calculation - but it only applies if
a) you finance 100% and buy everything turnkey
b) you take an extreme point in time as a comparison

Regarding a) of course all models existed back then as well but at least according to my perception, both the financing ratio was lower and the amount of own work higher.

Regarding b) there are always moments in the interaction between purchase prices and interest rates when they work with or against each other. Sometimes one is good and the other bad, sometimes both are good, sometimes both bad. And the transitions are always ugly - although in absolute terms it is certainly not bad, I agree with you on that.

Nonsense. If the land was equity and you built the house yourself over several years back then, it was of course cheaper than today. But today, with turnkey construction (preferably also with flooring/painting), it is more expensive for most people because they no longer want to do any work themselves.

Blabbermouth!!! Is my calculation right or wrong? When you realize that you are writing something wrong, you immediately respond with "that’s not what I meant" and "I am right after all."
There was no mention of the land equaling equity. You literally said "Just imagine that within 40 years you have to spend 168,000€ for a 700 sqm plot instead of 21,000€."

If the land was equity back then and still is today, then it’s even better. Because then the equity ratio has massively increased compared to back then. The construction cost index in 2020 was “only” more than twice as high as in 1980. So construction prices double or increase 2.5 times, land value increases tenfold. Salaries have also more than doubled from 1980 to 2020. So why is it harder today? This statement itself is simply wrong. It was more expensive and harder to afford a house in 1980 than in 2020.

However, I agree with you that more sweat equity was contributed in the past. And people simply built a house – not a shack with all kinds of (expensive to pay for and finance) frills. And only the required space. Today, you’re already considered poor if a couple without children builds less than 140-150 sqm of house. Back then we drove to Austria once a year by car for vacation. Today there has to be a flight trip to the Canaries in summer plus various other trips during other holidays. Back then just one phone + ARD/ZDF. Today three cell phones + DAZN + Prime + Sky + Disney+.
That’s why there’s no money left for the house today.

That is of course correct in this calculation - but it only holds true if a) you finance 100% and buy everything turnkey b) you take an extreme point in time as a comparison

The extreme point in time was not from me ;-) And if I calculate with 20% equity, the comparison also fits. The real extreme in the story was the period from 2010-2020 with continuously falling interest rates. Today the market is "more normal," but people have not yet processed that mentally. And I also agree with you about own contributions. But that is only one building block. Not the decisive one. On top of that come building regulations, client wishes (which make the houses extremely expensive - those who settle for 120 sqm as a family can save 150,000-200,000€ today compared to the mainstream with 140-160 sqm without making compromises on quality of life), etc. Professionally, I support a large "off-the-shelf townhouse builder." There it has now reached the customers that it no longer has to be the detached single-family house. Now a semi-detached house / terraced house is enough. Business is booming again. Those who built in recent years because money cost nothing have meanwhile disappeared from the market. It is becoming healthier again - also for the banks that are supposed to finance.