Decision house purchase: Existing property or new construction?

Hello everyone,

My partner and I have been looking for a suitable property (single-family house) in our place of residence for quite some time. Now, two opportunities to acquire an existing property have come up. However, since we are uncertain about the renovation or refurbishment effort required for each house, I wanted to ask for your assessment here:

Existing Property 1:
Year of construction: 1965
Living area: 140 m2 with about 45 m2 usable space (fully basemented) + solid outbuilding
Plot size: 800 m2
Orientation: South-facing plot
Heating: Oil heating from 2015
Energy class: Energy certificate is currently being provided (but I suspect worse than F)
Roof construction: classic gable roof, 1.5 stories. The attic is dry but uninsulated
Masonry: double-shell, but unclear whether with an air gap or not
Standard land value: 150 Euros / m2

With this house, the electrical and water pipes would definitely have to be redone, as well as the two bathrooms, the roof (with additional insulation), the basement, and the windows completely renewed (there are many double-glazed windows, but they are almost 40 years old). An advantage of the house is that we could theoretically move into the upper floor and first renovate the ground floor, although I know many advise against that. We also really like the south orientation and the established structure of the plot. A clear disadvantage here is the relatively high renovation effort and the fact that the house is located on the edge of a mixed-use area.

Existing Property 2:
Year of construction: 1975
Living area: 130 m2 with about 50 m2 usable space (fully basemented) + solid outbuilding
Plot size: 900 m2
Orientation: house stands fairly centrally on the plot, most of the garden is to the north, and there is also some garden space to the south
Heating: Oil heating from 2001
Energy class: F (175 kWh)
Roof construction: flat roof (roof felt last redone 25 years ago), house is built in split-level design
Masonry: double-shell
Standard land value: 180 Euros / m2

In this house, the pipes (electrical and water), the two bathrooms (main and guest), the basement, and the exterior walls would need to be insulated, and new windows would also be required here. Because of the flat roof, there is an option to install a photovoltaic system. Here, too, we could theoretically move into part of the house... An advantage of this house is that it is located in a purely residential area, but the disadvantage is that most of the garden lies to the north. Additionally, the construction style is somewhat unusual for us.

Since neither of us are major DIY experts but are willing and able to help out, we wonder if it even makes sense to buy such an old house and gradually renovate or refurbish it over the years. Furthermore, we are unsure about what costs might actually arise from a renovation, without the expectation of turning an existing property into essentially a new build.

Another option would be a new build in a new development area. Even though we have some equity (about 20% of the costs for the new build including the plot, i.e. around 110,000 Euros) and can finance 170,000 Euros through the KFW 300 program, a monthly payment of almost 2,000 Euros is quite daunting. On the other hand, a new build would offer not only design freedom but (hopefully) also some cost security for the next 10-15 years.

My specific question is therefore: What would you decide in our place? Does the purchase of an existing property and the idea of gradual renovation (floor by floor or the worst before moving in and then over the years the second bathroom, basement, etc.) even make sense from a cost perspective? Or might we end up with a similar cost volume as with a new build, only that an existing property remains an existing property? I am also thinking about the issue of municipal heat planning and the beginning CO2 pricing...

I look forward to your suggestions.

my partner and I have been looking for a suitable property (single-family house) in our place of residence for some time now.

That is very good, stick to it. Many seekers make the mistake of expanding the radius and/or diluting the requirement profile.

Masonry: 2-shell, but unclear whether with cavity or not

That can be found out. Several people here can interpret plans and also do forensic analysis in general.

For the second property, I explain it by the split level, but also for the first property the "full basement" is smaller than half of the living area – clarify that. Overall, we need significantly more information about the properties, including pictures.

1965 will soon be sixty years old and will mean, for example, cast iron sewage pipes (and possibly even lead fresh water pipes). 1975 was also still before 1980, so several evolutionary steps behind the energy standard. Both properties will have their challenges.

Or will we possibly end up with a similar cost volume as with a new build, only that an existing property remains an existing property?

That depends on what you want to achieve, keyword "Pareto". If you want to fully catch up on the house’s age, it will be more expensive than a new build. Those who modernize to a target state "like the year 2010" will get away cheaper.

An additional option would be a new build in a new development area. [...] At the same time, with a new build, we would not only have design freedom but (hopefully) also a certain cost certainty for the next 10-15 years.

Conceptually create a "positive definition" of the property regardless of existing stock or new build. Both variants must then be measured against this (not precisely planned) "reference house."

How much are the two houses supposed to cost? The whole question stands and falls with the price. Realistically, only the walls will be left of the houses, so they should be cheap accordingly. With such houses, you quickly sink 200-300k into renovation. I would generally advise against the plan to do it gradually over dozens of years. Unless you see it as your hobby to work on the construction site every day after a 40-hour job and want to live on the construction site for the next few years. If renovating, then everything inside that is dirty should be done before moving in. The roof or facade can always be done later.

The houses each cost just under 250,000 euros including additional purchase costs. Costs for the renovation amounting to 200-300,000 euros... phew, honestly I did not expect that. That brings us to almost the same costs as a new build, and mind you, with more favorable interest conditions for the KFW 300... Is it even possible to carry out such a renovation on your own or does coordinating all the trades definitely require an architect, who of course also wants to be paid? How does an average person approach a project like this? When calculating the living and usable area of the split-level house, I need to check again, as they are only given as a total area of 180 m2.

If you start everything from scratch, you also have the complete construction costs. So roughly estimated 1500-2000€/sqm. And that results in the total sum, depending on the specific scope and own work. At 250k including additional purchase costs, you can definitely also take the existing property. For 450k you won’t get a new build including land and exterior facilities, especially not with a basement.

Here is a current example from a user who is renovating everything:
Or here from another:

The houses each cost just under 250,000 euros including purchase incidental costs. Costs for the renovation amounting to 200-300,000 euros... phew, honestly I didn’t expect that. With that, we are almost at the same costs as a new build, and that is mind you with more favorable interest conditions for the KFW 300...

With the renovation costs (300k euros I also find exaggerated based on experience, unless you also start changing floor plans etc. The basic building fabric could be quite okay given the years they were built) you can also make use of KfW. Then you should at least take the 261 – currently you get a max of 150k euros at 1.65% plus a repayment subsidy of up to 37.5k euros (although KfW 40EE would already be a tough nut to crack...). Unfortunately, the houses do not seem to also belong to the Worst Performing Buildings, which would have yielded an additional 10% repayment subsidy. KfW70EE should be doable without major problems = 22.5k euros repayment subsidy, that would then correspond to the generous photovoltaic systems as a counterpart.