Construction costs are currently skyrocketing

  • Erstellt am 2021-04-23 10:46:58

WilhelmRo

2022-06-28 15:40:17
  • #1


Is that true? Whether I have 100 loans with €10 interest or only 10 loans with €100 ... I end up with the same, don't I? fail
 

Torti2022

2022-06-28 15:45:21
  • #2

100 loans of €1,000 each with an interest rate of 1% is naturally equivalent in burden to 10 loans of €1,000 each with an interest rate of 10%. But in the first example, you take out loans totaling €100,000, in the second example only €10,000. And thus, the money does not multiply as quickly anymore.
 

WilhelmRo

2022-06-28 15:52:40
  • #3
100 loans where the bank makes 10€/month each = 1000€/month. 10 loans where the bank makes 100€/month each = 1000€/month. The ratio to time also remains the same.
 

WilderSueden

2022-06-28 15:57:09
  • #4
It is about the loan amount. And that naturally depends heavily on the interest rate given the same installment. As many home builders have just had to learn the hard way. They are no longer building, so the money doesn’t circulate through the construction companies either. Even if they were to build smaller as you assumed and could therefore reduce the loan... not many more people will take out a construction loan to compensate for that. Rather the opposite, rising interest rates affect everyone. Some can no longer afford it at all, some can only build smaller.
 

WilhelmRo

2022-06-28 16:21:24
  • #5

Then example calculation with smaller volume (money and house).
Earlier:
600k€ with 1.2% interest = 600€/month interest
100 people: 100 * 600€ = 60,000€/month

Today:
300k€ with 2.4% interest (fictional as example) = 600€/month interest

Or to extend your statement, and some can still afford this interest (I would be interested in how many still borrow 600k€ at 3.5% interest)
Then the sum mixes:
A few:
600k€ with 3.5% = 1750€/month interest
A few more (build smaller):
300k€ with 3.5% interest = 875€/month interest
Out of 100 people:
10 * 1750€ = 17,500€/month
50 * 875€ = 43,750€/month
40 (can no longer build)
= 61,250€/month

Interest per month remains the same
 

Torti2022

2022-06-28 16:29:12
  • #6
As writes, just like me, the loan volume is different. At higher interest rates, simply not as many people can afford to borrow money. And this is already clearly noticeable in the industry.
 

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