Is a new building realistic?

Is Steffen right - just read today, the main development area is the rural small town, followed closely by the city along with the village. The median household income with two children was €3440, with one child €2950. If now 50% own property, it probably starts somewhere around €3500 - or do I have a flaw in the logic? Inheritance would of course be something else.

Steffen is right - just read today, the main building area is the rural small town, followed closely by the city along with the village. The median household income with two children was €3440, with one child €2950. If now 50% own property, it probably starts at around €3500 somehow - or am I missing something in the logic? An inheritance would of course be something else.

Hello BeHaElja, I wouldn't see it that way, certainly people with significantly less than €3500 net also own property, but that is not necessarily a new build.

That's exactly how it looks. If everyone were to accept all the well-meaning advice (only 30% of net income, everything must be affordable with one salary), then we would probably have 50% more renters than homeowners in Germany and the homeowners we have would live in a very cheap house aka a wreck so that the installments wouldn’t be too high.

You’ll laugh, but we do have 50% more renters than homeowners. According to the Federal Statistical Office, 28% of households can afford their own house. If you also include condominiums, that amounts to 46%, which means that 54% of households rent.
Still, I agree with you if you think that 30% of net income is calculated a bit too cautiously. I think the advice is up to 45% - the truth lies somewhere in between...

We are also thankful for the advice. But is it really the case that we only have 100-200 EUR left after all expenses and therefore truly live on the edge? I don’t think so. Sure, we don’t have 2000 EUR or more left per month either, but there is a buffer so that expenses for food and other things can also increase.

For example, I haven’t read a single time here (You have calculated the costs narrowly, but you still have XXX Euros left per month to cushion possible changes). It is almost as if the 700 EUR + shift bonuses are simply ignored, or put differently, if sometimes 1000 EUR after ALL expenses are not enough at the end of the month, well then who can still afford property nowadays. Probably only the top 10,000.

I would say your main problem is the outsourcing of all positions that can’t be booked under “everyday life.” In doing so, you lose sight of how large this item actually is and therefore cannot understand if someone at best attests you a “buffer” of 300 euros.

Calculate it yourself (I deliberately take low values):

You already mentioned daycare meals --> 50 euros/month
Once a year around the child (clothes, toys, car seat, etc.) for 120 euros --> 10 euros/month
Once a year one pair of pants each at 24 euros --> 4 euros/month
Once a year one set of tops each at 24 euros --> 4 euros/month
Once a year new underwear and socks at 12 euros each --> 2 euros/month
Once a year a barbecue party for a birthday at 96 euros --> 8 euros/month
Twice a year a good book/a CD (x2) at 15 euros each --> 5 euros/month
Every 2 years a vacation at the sea: 600 euros AI --> 25 euros/month
Every 2 years a new pair of shoes at 48 euros --> 2 euros/month
Every 5 years a new laptop/tablet/PC (x2) at 240 euros --> 8 euros/month
Every 5 years a new smartphone (x2) at 240 euros --> 8 euros/month
Every 7.5 years two sets of new tires at 280 euros each --> 6 euros/month
Every 10 years a new piece of furniture averaging 360 euros --> 3 euros/month
Every 10 years a new TV/projector at 480 euros --> 4 euros/month
Every 10 years a new dryer at 240 euros --> 2 euros/month
Every 10 years a new dishwasher at 240 euros --> 2 euros/month
Every 15 years a new car at 10,000 euros --> 56 euros/month
Every 15 years a new refrigerator at 480 euros --> 3 euros/month
Every 15 years a new washing machine at 480 euros --> 3 euros/month
Every 20 years a new stove at 480 euros --> 2 euros/month

That’s already 207 euros monthly so far. However, not one cent is included for the maintenance of the house and the mentioned things must also endure the given period without breaking.

Small things like a new light bulb (or even a lamp), new dishes, glasses, cutlery, pots and pans, PC peripherals, printer cartridges, printer paper (you can tell I let my gaze wander through the apartment, right?), cinema, eating out, zoo visit with the little one, a new plant for the apartment/garden, new bed linen, towels, windshield wipers for the car, hairdresser visits, co-pay at the dentist, the little one’s hobby, tools, decoration, etc., I have left out directly.

Now you have an income of 3800, of which 2400 remain every month (rent excluded), with which you want to cover an installment of 1200 plus 180 euros ancillary costs. That initially leaves you a calculated 1020 euros “buffer,” but all of this still has to be paid from that. Realistically, you really only have a “buffer” of maybe 300 euros.
And now you become unemployed and your actual net (including all allowances, etc.) is then, let’s say, 2000 euros. As a calculation basis, there is 67%. That’s then 1340 euros, i.e. 260 less than the net amount calculated here, ergo you are then short by 260 euros and it gets very tight if it even fit before.

The point is: It’s doable for you but in this constellation right on the edge. Any unforeseen difficulty can break your neck. If you want to bear the risk – go for it!

Hello BeHaElja, I wouldn’t see it that way, surely there are also people with significantly less than 3500€ net who own property, but that is then not necessarily a new build.

It would be interesting to know the average household income of builders. But such figures probably don’t exist, right? I think it is significantly higher than 3500 EUR net... maybe 4500 EUR?

In our building area probably > 6000 No idea... but there are now houses here for 700k+ plus 300k-500k land. They’re all crazy

It would be interesting to know the average household income of homebuilders. But such figures probably don't exist, right? I think it is significantly higher than 3500 EUR net... maybe 4500 EUR?

In our building area probably > 6000. No idea... but there are now houses here for 700k+ plus 300k-500k land. They're all crazy

One can assume:
Let's assume a purchase price or construction and completion costs of 1,000,000 euros. Banks, according to my current experience with the stricter regulation (BASEL II or III), are rather unwilling to finance more than 80% loan-to-value, i.e. equity of at least 200,000€ or 300,000€ is required here (inheritance generation after all).
We continue calculating with a loan of 700,000€ and an age of the homebuilder family of 35 years; the loan is to be repaid in earliest 20 and at latest 30 years, i.e. we start with 3% amortization and a 20-year fixed interest period, a possible interest rate would be 2.0%: total annuity therefore 5.0%.
From this, a monthly payment of 2900€ is calculated: added are the ancillary costs of the house; for a property of 1,000,000€ I would calculate at least 700€/month here (after all, you still need a cleaning lady and gardener). Then we arrive at a total monthly expense of 3600€.

Now my variant: maximum 30% of total net income: at least 12,000€ net.
The risky variant: 45% of total net income: at least 8,000€ net.

If more equity is available (due to a larger inheritance or higher income (which is supposed to exist as well)), the expense would of course decrease!

We have 17 million households that are homeowners. Of these

- 5 million with a household net income of 2000,- and less
- 10 million with 3200,- and less
- 13 million with 4500,- and less

We have 40 million households in total, if 28% of them own a house, that is about 11 million households, with the remaining 6 million then owning condominiums. If you roughly exclude those who actually cannot afford to acquire property based on their income but have inherited it, it can probably be stated that the average builder is likely to have a household net income well above 3200,- euros.

Or also: Every fourth homeowner has a household net income of over 4500,- euros