Financing new construction of a single-family house in the Greater Munich area

Hello,

like many others, we are currently facing the question of whether a new build is financially feasible for us. A plot of land, just under 1000 sqm, is available in the Augsburg area.
We are currently in the final stages of the plan. It will be about 170 sqm ground floor + upper floor, plus basement and double garage. We don't have any offers yet, but I would now estimate without much own contribution at 600 - 700 k. Is that realistic? We understand that we can still make some compromises with the plan, build smaller, without a basement, initially without a garage...
The plan is basically to continue now without waiting and to start building as soon as approvals etc. are available. But since everything will still take a while, of course, we would wait and see how things develop over the next few months. If everything progresses further, I think we would be finished by early to mid-2024.

General information about us:

[*]married couple
[*]34 and 37 years old
[*]2 children
[*]I am a civil servant, my wife is employed

Assets / Income

[*]Net salary together approx. €5600
[*]2x child benefit = €438
[*]Private health insurance: €400
[*]Insurances: €200
[*]Current living expenses (food, everything related to the children, travel costs, care products...): €1500
[*]Additional everyday costs for my wife and me total approx. €400
[*]Assets approx. €140 k
[*]Paid-off condominium, which is to be sold after the speculation period at the end of 2023: approx. €220 k (this would be the current estimated price, but of course it could be less in about a year)
[*]As a buffer, we would estimate about €30 k that we would like to keep in reserve.

So we come to an available equity of approx. €140 k + €220 k - €30 k = €330 k

After all fixed costs, we have about €3500 left per month.

What is not included here yet are car repairs/insurance for two cars.

We would have to borrow about €370 k (assuming construction costs of €700 k).

If I look at the usual comparison portals, that would mean a rate of about €1600 for almost 30 years with 2% repayment and approx. 3.2% nominal interest. With special repayments, I think this can be adjusted.

As incidental costs for the house, I would estimate at least €500 (realistic?)

Then we would have about €1400 left per month, from which the cars are not yet paid. Inflation worries me, and the costs for the children will certainly not decrease either.

Salary increases as a civil servant tend to be rather limited.

We could also borrow about €200 - 250 k from our parents, although this would be credited with interest at an equal rate and therefore would not make a difference.

What do you think, is this feasible or is the buffer of around €1400 relatively small? I know this is still a relatively rough calculation, but have I fundamentally overlooked something or estimated something significantly too low?

Thank you and best regards

The financing itself is very healthy. I can't say anything about the construction costs.

A rough estimate:

170sqm x 3000€ -> 510k
Basement 80k
Masonry double garage 50-60k?
Plus kitchen, outdoor facilities, earthworks, utility connections,...

I don't see 600k here and 700k would probably be ambitious.

Thank you for the answers.
The whole thing is supposed to be a wooden house, whether prefabricated or self-organized through tenders, we are not yet sure. The garage can also gladly be a prefabricated garage, but as said, it can also be left out for now. But you still think that 700k is calculated too tight?
Then maybe asked differently. How much should be left after all costs including the monthly installment to be on the safe side? Or have I otherwise forgotten something in the listing?

The situation is currently difficult to assess, but €3000/sqm is certainly not rated excessively high. Especially for Bavaria. Basement and garage then do their part. What additional costs you will face depends heavily on the house builder. Especially with prefabricated house builders, the offers often apply from [OK Kellerdecke/Bodenplatte]. The costs also depend greatly on the plot of land; depending on the slope, it is cheaper to build the basement than to omit it. For outdoor facilities, you also have extreme variance, depending on the terrain and taste. It also helps to simply calculate everything, i.e. X sqm paving at Y€, base layer for paving, trees, flower beds, retaining walls, garden house, awning on the terrace,... Don't forget the wage for the gardener if you don't want to do it yourself. I find the financial plan OK

Through the high equity together with the apartment, a very healthy financing.

Inflation also worries me and the costs of children certainly won't decrease.

Inflation devalues debt, so you don't need to be that afraid. As a civil servant, your salary will be adjusted to inflation and somehow keep up. Children become more expensive, that's true, but that also remains within limits.

I would do it.