Construction costs are currently skyrocketing

which signs do you see that interest rates will rise again?

The ECB will raise interest rates to maintain the inflation target. The FED has already done this several times in the USA in recent years. However, the ECB has so far firmly stuck to the 0% interest rate policy. To be honest, it is only a matter of time until this is no longer the case.

The ECB will raise interest rates to maintain the inflation target. The FED has already done this several times in the USA in recent years. However, the ECB has so far stubbornly stuck to the 0% interest rate policy. Honestly, it is only a matter of time until this is no longer the case.

It’s not that simple. An interest rate increase would ruin the highly indebted southern European countries. That is the significant difference between the FED and ECB. There is no solution to the problem in sight. The ECB hopes that the high inflation is only temporary... if not, we have a serious problem.

Not only Southern Europeans would be ruined by high interest rates. Calculate what would happen if Germany had to pay 4% fifteen years ago. Then it would soon be over for them as well. France is still considered a somewhat reasonable debtor, but also spends money with both hands. I cannot imagine that we will return to a world with decent interest rates without the debts being inflating away beforehand. This can also happen through a longer period with 2-3% inflation and interest rates slightly below that. Double-digit inflation rates like in the USA in the 70s are not necessary for that.

Therefore, interest rates will not rise significantly for the time being, but at 2% mortgage interest instead of 1%, combined with the increase in construction costs, some dreams are over.

Would you wait with a construction project because of this crazy price spiral, or should that not matter? According to the motto: It won't get any cheaper anyway?

I would probably make it dependent on age and life course. For my husband and me it would make no sense to wait any longer, because then we would be dead beforehand. ;-) I think if money is tight, building now as relatively "simple" as possible (with the option of later expansion, perfection, adjustment, ...) would be my choice. We are now also doing this out of necessity, due to the price increase of our house builder. The amount of rent in the desired residential area as well as the amount of available equity, which is reduced by inflation and penalty interest rates, should in my opinion be taken into account, as well as the number and age of the children. New, more environmentally friendly building regulations, which in the short and medium term may no longer be compensated by subsidies. Perhaps also the reduced designation of building areas.

what signs do you see that interest rates will rise again?

The FED is gradually, albeit gently, raising interest rates.

Just a general question to the group.

Would you wait to start a construction project due to this insane price spiral, or should that not matter? Along the lines of:
It won’t get any cheaper anyway?

Background:
The developer has been whining to us for the umpteenth time in the preliminary planning phase that everything is terribly, terribly expensive.
One gets the impression that we are being gradually prepared for the real prices with a “salami tactic.”

I find that really difficult to answer. I think if you have just secured a plot of land, preferably with a building obligation, and can pay the price and/or contribute something substantial with EL, then just close your eyes and push through. It’s also a question of life planning and quality of life. How long do you want to wait if the family is perhaps stuck in an apartment that is too small and now is the opportunity to build? And who knows when prices will actually go down? Past forecasts have not always proven to be correct.

But always on the premise that it is financially feasible. Otherwise, quality of life can quickly come to an end. The press has also reported mayors saying that families have already returned their plots and the dream of their own home is over for them.

Whether, when, and especially where prices will actually fall is probably a crystal ball at the moment, unfortunately. :-(

The FED is gradually raising interest rates, albeit gently

Three steps are announced this year, target 0.9%. For 2023, 1.6% are announced, and 2.1% for 2024.

The ECB or Eurozone traditionally follows the dollar or the FED, no matter what was announced before. If the USA moves ahead, Europe will follow. Unfortunately, we are not yet in the area of a possible forward loan. I also assume that the interest rate turnaround is now becoming a real scenario (over the next few years, of course).