Construction costs are currently skyrocketing

Again the topic of own work, especially outdoor facilities: Without ever having done it myself before, I do think it’s possible. We were at the building materials dealer earlier because of the outdoor facilities. He also gave us a few small 1-2 person companies that definitely allow you to help out under guidance. For me, as someone somewhat clueless, that’s actually a good middle ground. I at least save a bit on craftsman hours, but still someone shows me how it’s done so it doesn’t turn into a total mess. I can imagine that about the first few square meters of paving are done together, then when I feel confident enough, I can do the next square meters alone.

Paving is like painting. The base is the crucial part. Setting the stones in the correct pattern at the end is not a problem at all. Screeding the base with a slope, without any dips, that is the difficult part. Especially if you haven't done it before.

I think we will see 3% and more in the medium term at a 60% loan-to-value ratio with a 10-year fixed term. 80-106% will rather be 3.5-4%.

Will there even still be many 100% financing options? Or even more, 110%? Meanwhile, numerous articles no longer mention 3% at the end of the year, but 4%. So it continues, with all the consequences for supply & demand...

But the power of central banks to simply set interest rates or even inflation rates is, in my view, an even more daring hypothesis after the past years. Everyone talks about it, but the data says something different.

You confuse the base interest rate with the long-term construction loan interest rate. These are more oriented towards the yield of long-term bonds. And for sure, we will see how a base interest rate can have an effect – namely when the ECB also has to bring out the hammer – interest rates up, recession & crisis come, economy gone, and the inflation spiral stopped. As has happened in the past as well.

You are confusing the key interest rate with the long-term construction interest rate. These are more oriented towards the yield of long-term bonds. And you will definitely see how a key interest rate can have an effect – namely when the ECB also has to bring out the hammer – interest rates up, recession & crisis there, economy gone, and inflation spiral stopped. As has happened in the past.

And what do the yields of long-term bonds orient themselves to? When I correlate time series, key interest rates and market rates for the standard 10-year bond are only loosely correlated to such an extent that no scientist would draw a direct connection from it.

Who really made a difference was Paul Volcker, who overnight added double-digit percentage points. Otherwise, I simply don’t find the often-claimed connection in the data – and also don’t find any papers that do. But everyone talks about it as if it were a fact.

I find that strange! Without guarantee, since I can of course be wrong.

And what do the yields of long-term bonds depend on?

Supply and demand. A buyer is currently withdrawing more and more. In addition, demand is determined by inflation expectations and economic outlook.

Is it already observable that the massive decline in steel is being passed on?