You always have to see the proportionality. Here, of the 1.1 million budget, the land alone already devours 570k €. A plot of land for 570k €. Almost 1,050 € / sqm. Simply madness. I could have as much money as anyone else – it wouldn’t be worth it to me. But well, the OP will have his reasons and dreams, and personally I say: Nothing speaks against a cheap, small, beautiful house on a ridiculously expensive plot of land. Why not?
I believe you are mistaken here; if you “had as much money as anyone else,” 570k would no longer seem so excessive to you. You would then add this sum to your, let’s say, 3 million fortune and realize that it’s quite manageable and simply the price in the Munich area if you want to live there :) In fifty years, maybe everyone will be paying 3 euros for a single roll and now saying “that’s just not proportional anymore.” But it is of course still true that the land prices here are no longer feasible for many to still build a normal house. If it’s just barely possible, many then still prefer to have a small, humbler home rather than be eternal tenants, since rental apartments here are also not easy to find, big, or cheap. For families with children, it is often the better solution to at least have a bit of garden and later a good retirement provision, even if it becomes very frustrating at times when you, labeled by politicians as “rich” (= working at Audi or BMW), cannot afford anything beyond the standard fittings, as is currently the case with my sister-in-law and her husband: He is in a good position at BMW, she is a senior physician, both paying the top tax rate, but in the countryside near Munich, nothing more than a simple prefabricated house without expensive extras is possible. But we also have colleagues and acquaintances who have changed jobs because of the horrendous prices and have become happy in their own house in Lower Bavaria; it’s simply a question of how rooted you are here and whether you have family there in addition to friends.