Interest rate development current situation. Build now or wait?

I am aware that no one here can say that, but maybe someone has a little more knowledge than us.

We will save money one way or another. Our only concern is that we cannot save with the rising prices. In other words, we will save another 30k in 2 years, but prices have risen too much in the meantime. So that we again do not have 20-30% equity and an additional reserve.

I cannot predict the future, but here are a few pointers: So far, short-time work benefits and similar measures have prevented large-scale loan defaults. Looking at the annual financial statements of the industry, a crisis and major cutbacks are rather not to be expected in the near future. Lockdowns mainly affected areas where homeownership is already rare. Currently, it is not expected that a large number of people will have to sell within the next 1-2 years, which would significantly increase supply. On the demand side, the outlook is not better in the short term. Due to low interest rates, demand remains high, and as long as the labor market does not collapse significantly, demand will continue. The increase might slow down somewhat because banks are no longer willing to keep up with the high prices and will therefore require more equity. However, this will not lead to falling prices.

When it comes to building, a few other factors come into play. Building areas have much more interest than available lots. Accordingly, business is good for construction companies; a large prefab house manufacturer communicated to us a 15-month waiting time. In this situation, no one lowers prices, with an approximate annual price increase of 4-5%. Additionally, there are always further requirements for new buildings that make construction more expensive. The next phase of the energy saving ordinance is certain; then the currently KfW55-standard house will become mandatory. That is more expensive, and the €18,000 subsidy will no longer be available. Furthermore, there are various municipal regulations that make affordable building more difficult: mandatory photovoltaic systems, retention cisterns, green roofs, and so on. In this respect, it is better to build early than to wait.

But: it must also be financially feasible. If you have little equity, that is problematic. It might be worth saving more in that case. Exact details can only be provided with concrete numbers regarding equity, income, and your desired place of residence. Regardless, the search for a plot alone can take years. Therefore, it doesn’t hurt to start as soon as the rest fits and to save equity in the meantime.

Buy stocks now or wait? It has never been cheaper. The same applies to real estate. You can take advantage of fluctuations, but that is not so easy with real estate because your life situation has to fit as well.

Only fluctuations can be exploited, but that is not so easy with real estate, as the life situation also has to fit.

There are a few other problems, such as the fact that prices are not as easily visible as on the stock exchange, the amount exceeds the usual investment of ordinary mortals (=nothing works without a bank), and the transaction costs are significantly higher than 1€ plus spread ;)

Of course, it also depends on the region. In our area (20,000 inhabitants, rural region), prices have also risen enormously in the last 10 years. At the same time, there are plenty of houses here where people over 80 years old live. However, I doubt that prices will fall here again. The heirs will of course try to sell the properties at the highest possible prices. And currently, houses are being offered here for which you wouldn’t have even gotten half the price 10 years ago. Nevertheless, there are interested buyers, mostly from other regions where prices are normal.

If you want to buy/build, I would do it now as well. The situation will not change in two years. If you’re lucky, something might change in the next 10 years when the "old" properties become available and prices might drop somewhat due to the quantity. But then you would have to rent for another 10 years instead of living in your own home. And given the current interest rate situation, in my opinion, it is no longer that important whether and how much equity you have. What’s the point of saving equity for another two years now if construction prices will also rise again in the next two years? The interest rate difference is currently extremely marginal, unless you maybe only have a 60% loan-to-value ratio, but normally you wouldn’t be able to save the 40% within two years anyway.

Now buy stocks or wait? It has never been cheaper. Same with real estate. Only fluctuations can be exploited, but that is not so easy with real estate, as the life situation must also fit.

Stocks have never been cheaper???? Help.. But true, until the bubble bursts. ;)