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

If there is no obligation to build and you are in a booming region, I would keep the property and pay it off if you can afford it.

I see it the same way. I would wait and build in a few years when the situation has calmed down and stabilized. Other savings rate, salary increases, current rental costs, age or time until retirement, children or other factors could also be taken into consideration...

I am also a long-time silent "lurker" in the forum, and we are currently facing the same decision.

We purchased our plot of land at the beginning of the pandemic at a normal price with favorable interest rates. After several delays, construction can start for us this year. A detailed cost breakdown cannot be created at this time, so we have applied a 20% buffer to the cost estimate from Q3/2021 (whether this will be sufficient will probably only become clear during construction). We would pay for the construction of the house largely through the sale of an existing property (apartment sale).

These are the questions that have occupied us in recent weeks:

1) Should we sell the plot of land again?
At present, a sale could yield about a 15% "profit." This profit must be fully taxed, and after deducting the incidental costs and the planning activities already paid for the house, it amounts to a break-even calculation.

For us, the following aspect is much more important when answering the question:
We have been looking for a plot in this area for about 7 years, and only by luck did we get this plot. Selling would mean for us that we will not build a house in this lifetime since the likelihood of getting such a plot again is simply too low (we are not getting any younger).

We have now answered the question for ourselves as follows:
Even if we do not build, we consider the plot (at least initially) as an investment.

2) Should we start building the house immediately or wait another year or longer?
I believe everyone knows the current situation:
- Raw material prices at record levels
- Rising construction interest rates
- Very high inflation
- High demand for homeownership
- Extremely booked craftsmen companies

I believe no one can predict how this will develop. For our part, we do not assume that prices will drop dramatically next year. In addition to high inflation, we will certainly still feel the effects of the industrial bottleneck next year. The rising construction interest rates will certainly lead to falling prices, which will be offset again by inflation.

Based on these considerations, we have decided to build this year because we do not expect it to be "significantly" better next year.

If there is no construction obligation, I would definitely keep the property. Land prices will surely not decrease in the future, as building land will become increasingly scarce due to various factors. Whether you build now or in the future, no one can reliably estimate that here, as no one knows how things will develop in general.

the decisive factor should above all be how strong the dream of living in one's 'own four walls' is.
Are you willing to sacrifice 2-3 years for it?

Just to give an example - and everyone has to be aware of that themselves. I don't want to praise myself here, nor endorse my actions. We built an above-average large, very constructively demanding, and in terms of return, i.e., cost/benefit technically - actually a bad house, with many many many and even more - non-German speaking, foreign helpers. (Thanks to Google Translator) Others would call this a hobby.

- We saved about 200-250k net in 2 years (comparison architect build turnkey 1300 vs 2200-2400€/m2).
- But I also spent at least 4 hours every day on the construction site for 2 years, Saturdays until 4 p.m.
- We are now the happiest people on this planet, and this project has brought my wife and me closer together than anything else before in our marriage.

However, if you don’t pull together, can’t persevere in tough times and are not ultra-optimists, such a project can also bring irreversible, serious risks.

Everyone must be aware of this fact.

In retrospect, there is only one thing to say: without ambition & unconditional commitment, we would still be at the same place as 5 years ago.
- Only by now with children, animals and no space in the city, trapped.

For me, it was the greatest thing to build my own house for myself and my family. It is certainly an extreme example now. There is always the middle ground.

Just don’t sell the property as long as there is a fundamental willingness to build in the future. Land remains permanently scarce as long as the principles of the Greens make the designation of building land so extremely difficult. So building prices can eventually become more bearable again in comparison to income. And the utilization of companies could eventually decrease. But a property will continue to be in demand.