Construction project on hold - keep the property or sell it?

Thank you very much in advance for the numerous replies!

Nope.

I don't expect any crashes at all. Maybe prices in the absolute boom regions will come down a bit (we’ve already seen that for a while in Düsseldorf, for example), but that’s not a crash.
Apart from that, if crashes were to happen, of course the ground price would also go down.

You never catch the right moment.

Since the new guidelines don't exist, you're on the wrong track. The question is whether you want to own property or not. I also don’t see any price decline in plots – if anything exists in Germany, it’s liquidity. And liquidity always likes to flee into tangible assets. That has been the case in recent years and will continue to be so.
If you want to own a home, then build. If you actually don't feel like it at all, then sell the plot, pay your taxes on the profit and be happy about it. However, if half a year later you get the idea to want to build again, it will be noticeably more expensive at least in terms of financing than at the time of your plot financing. You can already double the interest rate now.

Actually, these guidelines are supposed to come. I’ve heard that external links are not welcome here, so just google "Richtlinien Immobilienfinanzierung 2023".

Do you still want to build? Is the plot in a location that’s good for you? Is there a building obligation? (That’s often the case in new development areas) Do you feel comfortable in your current living situation or is it foreseeable that you’ll need something else soon? (Because of kids or annoying neighbors or whatever)

I find the situation difficult too. We have a new development area nearby that we had been eyeing... But by now I almost hope it will be delayed quite a bit before it goes on sale.... If prices were somewhat predictable (even if on a high level) that would be one thing, but right now everything feels pretty unpredictable.

My first idea would probably be to try it anyway, to reset my financial framework again in the current situation and see if building is still possible. Probably in a scaled-down version compared to the original plan. But there are many ifs and buts, depending on how the personal situation looks right now.

Yes, building would of course still be the best. The plot couldn’t be better located for me personally. Although I have a commute of about 15 km and no way to use public transport, I need just 10 minutes by car to get to the "city", 10 minutes to the highway, etc. so it's secluded and quiet but still centrally located enough. There is no building obligation. I haven’t felt comfortable in the current apartment for a long time. Terrible (excuse me) neighbors, too small an apartment, no garage, rising rents and so on.

Exactly the point about the unpredictability makes me most doubtful. We would award the trades ourselves; for things like electrical work, plastering, tiling, painting, etc., we would ACTUALLY have "good" contacts allowing us to do quite a bit ourselves.

But no one really knows what tomorrow will bring right now...

Additionally, we had actually planned to apply for KfW funding since it would have been worthwhile for two units and we were planning to use a heat pump combined with photovoltaics and a ventilation system, which would have kept the additional costs within limits.

But due to the halving of the funding and the increased requirements, that will probably fall through as well, depending on what interest rate the KfW now sets.

Even if the situation is still so optimal, I would not sell. Financed at a low cost. The floor will not come back. At the moment, there is probably no safe investment.

I would not sell. Whether I would build.. Probably yes, if I can afford it financially. Then with a buffer and the GU should order the necessary materials upon contract conclusion. I personally expect inflation to continue for several months at the level we have now. Interest rates are still low, money is abundant. That alone would be an indicator, but there is also a real shortage of some goods which drives prices even higher. The ECB is almost powerless if it wants to avoid a series of bankruptcies. My conclusion: Inflation remains high, prices continue to rise, build if financially possible.

If there is no building obligation and you are in a boom region, I would keep the property and pay it off as long as you can afford it. It becomes difficult when there is already construction on the left / right / front / back, making your property "unattractive" for sale. 400 sqm is not a huge plot, and depending on how the neighbors position themselves, there won't be a queue of buyers. Better to sell for 1k per sqm and enjoy the profit.

I would definitely keep it. No one could take it from me.

And calling the property "small" is nonsense: Where the square meter costs 1,000.-, you are the king with 400sqm.

Yes, these guidelines are supposed to come. I have heard that external links are not welcome here, so google "Richtlinien Immobilienfinanzierung 2023".

So far, there are only considerations to limit the LTV. Nothing more. Those who basically cannot build today anyway (but still really want to and come up with alternative credit figures) definitely would not be able to then. Those who can build today will still be able to then. It is about slowing down full financing in overheated markets.
All banks are quite relaxed about this (I myself work at a real estate bank).

P.S. I find 400 sqm quite generous in a top region and always sufficient for a house.