Construction costs are currently skyrocketing

here it’s about €833 per month…

And now it’s already €1200 extra per month. :rolleyes:

That makes a total of €3100 with the rate?:rolleyes:

The calculation is far from over…
So you get the €280k for 1.25% interest. (Because you’re “pumping” €144k into the building savings contract). Is that assumption correct? You would then have to mortgage the remaining approx. €60k at the market interest rate in 2031. Also correct?

If you bundled everything into the loan, the residual debt would be about €180k (instead of €345k). Also correct?

And how high does the interest rate need to be in 2031 for you to “win”? (It’s too hot for me to calculate now :D )

Haha, same here. It’s too hot for me as well! So, if in 2031 we put the entire remainder into a loan at (optimistically) 2%, more likely >4%, we would pay significantly more interest than with the building savings contract plus possibly a “small loan”. The calculation makes sense for us in my opinion because we have planned for large special repayments anyway in the coming years. If the money had been liquid last year, we would have used it more as equity and taken out less loan and then probably only paid 0.8% interest.
That was not possible though. Yes, indeed we have a considerable monthly rate, but we don’t have to service it. If there are fewer building savings contracts, then it’s the same. We accept that risk. Without the reserves available soon, this construct would of course make little sense.

It doesn't necessarily have to be that way. In my opinion, we have been in a "stagflation" for at least half a year. Not only energy prices but also various raw material prices cannot be easily lowered by monetary policy decisions within the EU.

It will of course be exciting to see how the construction industry deals on the one hand with high raw material prices and on the other hand with a collapse in demand. As I know Germany, my guess would be: big players devour small ones and government money for the large developers.

Big players only build multi-family houses & neighborhoods in series. The market is already quite dried up. There are currently still a few articles in which finance people quickly calculate why buying to rent is still a great investment despite the high interest rates. The aspect of excessively high prices was of course consciously excluded. Otherwise, there are only a few who still want to write off the turning point in time. So prices (and valuations) will fall. For new construction certainly at the very end. But at some point substitutions will be possible and international transport capacity will also be more balanced again. The collapsing consumption will ensure that..

And whether the federal government still has much powder left to save the industry? It hasn’t exactly been sparing in recent years. And since the EU, USA, and China will probably all slip into a recession together, there could be quite different problems. Do you want to spend 50%+ of your income on housing?

And whether the federal government still has much ammunition left to save the industry? After all, in recent years they haven't exactly been moderate. And since the EU, USA, and China will likely all enter a recession together, there could be completely different problems. Would one want to spend 50%+ of their income on housing?

I have to think of the old Chinese blessing: "May you live in interesting times"

It is not said. There were long, long years with net income losses for many. The big problem was that the golden years were considered the normal state. Like here just now - "when will interest rates normalize again?". It is analogous to 1% repayment and the rest in ETF and BitCoin. We had those discussions plenty of times.. ;) But of course you are right, supply & demand come together and balance out. That will be exciting in a real estate market overvalued by up to 40%.

It is not said that salaries will rise for everyone. We have upheavals ahead in various sectors, some companies will have to brace themselves. Energy and mobility are two prominent examples. A big unknown for me is everything summarized under the term deglobalization, which could quickly become cross-sectoral. Whether that comes and how is still quite open at the moment. And whether worse times now will then be the new normal or the temporary exception remains to be seen. History has examples for both interpretations. By the way, history also has examples of very low interest rates. And there are examples of hot real estate markets that are not slowed down by high interest rates for a long time (70s in California). It will definitely be exciting.

I'm curious. I hope that in 9 years (then our 10-year financing at 0.96% will end; the remaining debt will be around €300,000) the interest rates will normalize again. Although the question would be, what is a normal interest rate? :cool:

Currently, we have normal interest rates (3-4%). Key interest rate at 0% or negative interest rates and loan interest rates of 0.xx-1.xx% were unique. Those who did not secure 20-30 year conditions at those rates... we have advised and sold long terms 99% of the time.

The curve with interest rates rose very steeply after the ECB announced the hike. Now, after the ECB emergency meeting this week, the 10-year swap fell for the first time, before that there were increases every day of about 3-10%. This has also been reflected in the interest rates. The cheapest is now at 2.98% for 10 years, 3.23% for 15 years, and 3.34% for 20 years. The next few days will show where it is going. If the current pace continues, then 4% for 10 years in July is realistic. I naturally hope that it will calm down now, but the ECB probably has no choice but to raise interest rates and throttle the economy. It will be very bad for employees and employers in construction.

KfW raised to 3.42% today, after 3.33% yesterday.