New single-family house - realistic estimate of construction costs? Experiences?

Hello everyone,

I am currently facing the decision to purchase a plot of land in a new development area of a district town in Lower Saxony.

I am 27 years old and have a secure permanent job in a large corporation. My partner is currently taking care of our common child (1 year old). Therefore, I am currently the sole earner with a net income of €3350 + €194 child benefit. We pay a cold rent of €670, can save €200-300 per month, and continue to set aside €500 per month for travel, which can certainly be reduced somewhat. I am therefore assuming a possible repayment rate of €1100 in the worst case, and somewhat more in a year when she works. I currently have €100,000 in equity, and my parents would contribute another €50,000. Taking all parameters into account, I actually see a very good basis for financing.

The plot price will probably amount to €143,000 for 650m². The plan is a 120m² single-family house, solid construction, 1.5 floors without a basement, simple to normal standard with a double garage. Unfortunately, I do not yet have a real estimate of the construction costs. I am reading very optimistic numbers from developers, ranging from €1100 to €2000 per m² on construction blogs. If I assume the worst case, then that would be €240,000 construction costs plus about €25,000 for the double garage, with the land €408,000. Additional ancillary costs of just under €30,000 would then be added, so I land at €438,000, which would be my absolute limit.

Now I am asking myself how realistic these numbers for construction costs are. It is a large new development area, over 300 building plots in a peripheral location, catchment area of a large city with 250,000 inhabitants. All building plots are in this size range. The amount seems too high to me because how are families supposed to afford this? I am therefore considering waiting until prices fall because they are not able to sell the development area.

I would be happy if someone shares their experiences regarding their own construction costs and the sale of building plots in large development areas. Is a price drop to be expected at the current time?

I would ask myself if a house, why only 120 sqm? No more desire for children? You don’t have to build xxxxl, but not only 120 either…

That is quite easy to answer. We both agree that 120m² is sufficient for 3 children and will later still be suitable for living alone. My parents' house was 124m² and would also have been enough for 3 children. More space only creates more storage area, where over the years everything accumulates. I rather imagine intelligent room layout and do not want to unnecessarily create unused space through large hallways or a huge living room.

I'm just imagining this right now:

3 children's rooms @ 12m² make 36m²
Bedroom 14m² (You also want to fit a wardrobe in)
Bathroom 9m²
2nd bathroom (guest WC with shower, almost necessary for 5 people) 5m²
Kitchen + dining 20m² (L-shaped kitchen with dining table in the middle)
Living room 20m²
Utility room + laundry room 13m² (I have 17m² and it's packed full)
Entrance + wardrobe + hallway 10m² (assumed flatly)

Total 127m²

If you then shave off one or two square meters here and there (children's rooms 11 instead of 12, etc.), you get to 120m².

That works, on paper as well as in reality. However, I wonder what the point is. Skillful planning or not, it almost certainly leads to rooms being too small at critical points.
Don't get me wrong, I think it's good to plan according to needs. But for me, the proportions just don't add up here. Why does it have to be, for example, a double garage?

About your construction costs:
The calculation is about right. Add about 2000€/m² plus additional construction costs with exterior work, kitchen, furnishings, etc.

can save 200-300€ per month and continue to set aside 500€ per month for travel

So you go on vacation for 6000€ per year?
May I ask purely out of personal interest whether that is 2 vacations or one?
Otherwise, the calculation adds up:
Effective
Annual interest rate: 1.78 %
Monthly installment: 937.50 €
Outstanding debt: 156,195 €
Interest costs: 81,195 €

Although the outstanding debt looks a bit modest (20 years fixed interest rate).

And the other question, did the parental home have a basement?
I find 120 m² quite small for 4 people. But it’s all a matter of taste.

Kind regards

I am therefore considering waiting until prices drop because they can't sell the development area. I would be happy if someone shared their experiences regarding personal construction costs and the sale of building plots in large development areas. Is a price drop expected at the current time?

The joke was good. Now seriously... you must not hope for that, it won't happen. Also, as soon as the Baukindergeld (child construction subsidy) ends, construction prices will increase even further and plots of land will be snapped up even faster than before.

We have 2 children and are planning for 3. Our initial plan for 2 full floors shows 139 m² plus a basement, and I can honestly say that we have optimized everything that the space allows so that the children's rooms are between 11-13 m².

The 2000€ per m² is realistic; you should continue calculating with that.

Your age and equity fit. The landscaping will cost at least another 10-20k€. Simplified, you can calculate with 450k€, though of course kitchen, furnishings, etc. are still missing.

A 300k€ financing with 3550€ is also not a big deal, especially if your wife would go back to work within a foreseeable time.

But you can forget about anything becoming cheaper anytime soon. For example, steel prices are now adjusted upwards every six months or quarterly (comment from my shell construction contractor – unfortunately it cost me 2000€ more now). Also, labor costs on construction sites rise annually and continue to increase.