Construction financing for new builds + sale of existing property

Hello everyone,

since we have gotten the chance to acquire our dream plot, we would now like to build a house after all. Currently, we live in our purchased existing property, which we would probably only sell after completing the new build, so as not to be under time pressure. However, the current prices are a bit frightening. Our "knowledge" is still from 2011 and unfortunately everything has changed since then.

About us:

[*]Who are you? M + W
[*]How old are you? 38 and 36
[*]Are there children? 3 (1 year, 9 years, 10 years)
[*]Professional situation: M - civil servant, W - public service
[*]How many hours do you work? 40 / 0 (parental leave) from September 24 hours

Income and asset situation:

[*]What income do you have? M: €4,500, W: currently €300 on parental leave, from September probably around €1,000
[*]How much equity do you have? Remaining debt of our existing property is about €100k, sale value probably at least €450k
[*]Child benefit (monthly): €750
[*]Total income (from September): €6,250 p.m.

[*]Existing property value approx. from €450k minus €100k remaining debt

Living costs:

[*]House including everything (also including insurances): €1,600
[*]Fuel: €200
[*]Mobile phone: €50
[*]Groceries: €600
[*]Fixed costs per month from: €2,450

General information about the plot/property)

[*]Size: 1,100 sqm (slightly sloping to the back, we would fill in if necessary)
[*]Location: Lower Bavaria, near motorway connection, small community
[*]New build of a detached house (cube) planned (approx. 160 sqm) and pool

Plot purchase costs:

[*]€200k

Cost breakdown:

[*]Total costs new build: €500k?
[*]Deductible equity: proceeds from existing property minus remaining debt
[*]Financing amount: €200-250k?
[*]Monthly payment: €2,000?

We would have to commit to the plot next week and would probably initially finance only this. New build then possibly starting from 2024. If worst comes to worst, my wife could go full-time (2 days on-site, 3 home office). However, we would now rather not commit to the plot next week if a cube house including garage, cellar and pool would be totally unrealistic to accomplish.

Our current plan is that we would like to commit to the plot. Then pay this off additionally, finance the new build interim in 2024 (bad conditions, right?) and redeem it after completion with the sale of our current house.

We would be very happy to hear your opinions on this.

Best regards

a 160 sqm cube house including garage, basement, and pool

for 500,000 I consider unrealistic. Nowadays, the price per sqm for a house is calculated roughly at at least 2,500, rather 3,000 euros. And that would already put us at 400-480 thousand euros for the house. Basement, pool, land, garage don't work with the rest.

I consider 500,000 unrealistic. These days, the price per square meter of a house is calculated roughly at a minimum of 2,500, rather 3,000 euros. And then we would already be at 400-480 thousand euros for the house. Cellar, pool, terrain, garage won’t work with the rest.

The question also comes up: what can we still afford at our age to still live "nicely" on the side?

However, we would now be reluctant to commit to the property next week if a cuboid house including garage, basement, and pool would be totally unrealistic to achieve.

Then just cancel the property... Basement: €80k (estimate without further info) Construction ancillary costs: €30k Garage: €25k House budget €500k minus the aforementioned items then €365k. That is enough for 120sqm WITHOUT terrace, driveway, landscaping, and pool. If the size is sufficient for you, I will revise my "Then just cancel the property". But only then.

Comes the question: what can we still afford at our age to also live "beautifully" on the side?

It has nothing to do with age. The question is what you really need and what you want beyond that. With the budget, you can build a nice little house. But then only the house with a carport and, for example, a small attic where stuff is stored. Living beautifully is also relative...

Then just say no to the property...

Basement: €80K (estimate without further information)
Construction incidental costs: €30K
Garage: €25K
House budget €500K minus the above positions then €365K. That is enough for 120 sqm WITHOUT terrace, driveway, landscaping, and pool. If the size is sufficient for you, I will revise my "Then just say no to the property". But only then.

The 500 was an optimistic estimate, but in the end we neither want nor can we end up at a million all in.