House construction financing - What is possible and realistic for us?

Ok, if I build a villa with marble floors, it could get tight... of course, I must not forget the golden faucets either

But everyone has their own views and they are welcome to express them! But I am sure that I will not come anywhere near exceeding €650,000

If you buy used, the plot of land is included. Also a driveway, a hedge, trees, lawn, fences, small walls, a garage, etc. etc. etc....
That is a huge chunk of money that many like to conveniently overlook.

So, what is comparable? Here in 2017, we could have purchased a bungalow of our size built in 2000 in a similarly structured residential area for 280k. That is what our new build also cost. The finished garden speaks in favor of the existing house, against the house are the high incidental purchase costs, the old kitchen, possibly a room layout and tiles, and so on, which we do not like. Therefore, a clear preference for the new build on my part. Everything there is as we want it and new, but also bare. If I now compare new build and existing property directly at the beach or harbor, or a renovated old town house, then the existing property is more expensive. But that is more due to the location. A new housing estate is usually not the top location, but rather on the outskirts. Karsten

Because it is obvious and actually the case. If building new in a comparable location, with a similarly sized plot and comparably much living space were cheaper than buying used, NOT A SINGLE used house would be sold. These are economic facts; anyone who tells themselves otherwise, in the spirit of Steffen, also believes in Santa Claus.

So you are making a big mistake in thinking. There are simply many places in Germany where you usually cannot get a plot, and therefore existing properties are extremely overpriced! If you put in the effort/work/patience and manage to get a plot (church, private, municipality, city, waiting list, lottery, old grandma... there are many possibilities), then you can probably come out cheaper than buying used.

There are also people who want something immediately and simply have no desire for the construction phase.