House construction 2021 financing €500,000 opinion

Someone has to explain to me how a childless couple can have €2100 net less than a couple with 2 children. It can't be due to the missing child benefit :p. Nonsense evaluation!

Well, before accusing others of nonsense, I would at least GOOGLE ONCE. Then you wouldn’t look so hill-Billy-like. That might help across the pond – I would still rather discuss the equivalized income model..

Someone has to explain to me how a childless couple can have €2100 net less than a couple with 2 children. It can’t be due to the missing child benefit :p. Nonsense evaluation!

Correlation does not equal causation. One reason, for example: couples with children are older, therefore higher up the career ladder.

Someone has to explain to me how a childless couple can have €2100 net less than a couple with 2 children. It can't be because of the missing child benefit :p. Nonsense evaluation!

I agree with your analysis that it can't be because of the child benefit. I find your conclusion from that at least premature. Without having read the study, here are two quite simple possible reasons for income differences that deviate from the child benefit difference:

[*]Income increases with age. One could assume and consider that people (couples) with several children are on average older than couples with one child. [*]Possibly the decision against a second child is made quite often due to the income situation.

was faster

Well, even with 25 years, very few people build. You really have to save for several years.

That is basically correct – but as hampshire already said – construction and land costs have risen significantly faster than incomes in recent years. A "typical" €350,000 house from the general contractor could next year be offered again at 5% more according to the price list. €17,500 additional costs, meaning the "savings rate" alone has to be almost €1,500 per month just to keep up with inflation. Let’s assume the prospective builder already owns a plot of land. To build up equity, which is needed to get construction financing at reasonable interest rates in the first place, at least €2,000/month would have to be saved. "Net," that results in a ridiculous €6,000 equity advantage per year. This must then reach an appropriate loan-to-value ratio. From this you can see quite well in my opinion that we really are talking about a bubble here. The pool of potential players is decreasing year by year.

At the same time, the municipality will not let the great market situation (of which it is, of course, completely innocent) pass by, meaning land prices will also be pushed up vigorously.

Since this pattern appears everywhere, the locksmiths’ arguments about €6,000/month salaries don't help. Such incomes are rare and also not evenly distributed regionally. The end will come when the pool of potential buyers is exhausted and the real enablers of the game pull the plug – the banks.
Because the "price increases" in construction are not "real," i.e. not the result of broad inflation across society, but special effects – they are milking the cream. A house from 2015 from a standard general contractor is pretty much the same as in 2020 – so why should it be 25% more expensive? And from the bank’s point of view – will they realize such a large delta again for an identical building at a forced auction? Or is there just too much room, such that those are just enthusiast prices?

The current tightening in loan approvals regarding collateral speaks volumes. Banks see the risk too, and only as long as the borrower pays for the hot air with their own money are they still in. A good income alone excludes you – only those who can also blow grandma’s inheritance up the chimney are still in the race.. ;)

The problem with that – grandma’s inheritance first has to be able to be sold at the desired price – the same applies there..

A house from 2015 is pretty much the same as a standard general contractor today in 2020 - so why should it be 25% more expensive?

The 25% price increase is significantly disproportionate to the increase in labor costs. However, the requirements have become more stringent since then and possibly the demands on the equipment as well. A real price driver is the shortage of skilled workers, another price driver is the low interest rate.

The main price driver is and remains the ECB. Cash is not protected against inflation and we are heading towards hyperinflation. Currently, the inflation rate is not even 2%, but that can change quickly. Stock prices are correspondingly high when considering the current situation with Corona, etc. Gold prices as well.

Nevertheless, the air is becoming extremely thin in real estate because where there are no buyers, prices can no longer increase. Then market consolidation must occur. The only thing that can counteract this is hyperinflation, then prices will skyrocket and a single-family house will only be purchasable for several million euros.