Offer comparison and liquidity planning for new construction, any experiences?

Hello everyone,

after having read so many helpful posts here today, I had to register right away and describe our current situation:

We are a family of four with two small children, far away from acquaintances and relatives (this already means we have to do some work ourselves because we both work and have no time or energy left for it)
Net income: ~€6300
Expenses: ~€2700 (of which >€900 for daycare fees. We actually live very frugally and one of the main expenses currently really is the children :D. ~€1400 rent including utilities)
Capital: ~€500,000 (we only want to use part of this, depending on what would be ideal for financing)
Private loans: €150,000 (repayment over 15-20 years, interest-free)
KfW300: €220,000 (we could get this if we build in 2025, assuming KfW40 + QNG. Repayment within 10 years, then interest of ~0.1-0.2%)

We are currently applying for a new development near Tübingen at €650/sqm --> total plot price: €229,000 excl. incidental costs
We are total novices and not very skilled with crafts and have researched a lot in the past weeks – but we are still at the very beginning. We have already obtained several offers for monolithic construction, solid wood, and several timber frame construction providers.
The house we requested:

No basement (we had to scratch that immediately after the first offers, because it is so much more expensive)
Carport (garage not allowed in residential areas)
170 sqm floor area on 2 full floors on a slab (also to compensate for the missing basement and garage)
At least 5 bedrooms (2 children’s rooms, master bedroom, and 2 offices/guest rooms for home office)
District heating available in the new development
Shed roof required and all roofs must be greened

We have already done preliminary samples and have a relatively good overview of what extras we want. These are few points and in most cases we could live with the standards from the construction and service descriptions.

Now to the actual problem:

The offers we have for the house + carport + photovoltaic + storage all amount to over >€620,000. I estimate the incidental costs (construction incidental costs, outdoor facilities, kitchen, district heating connection, architect, etc.) at ~€100-130,000. Simply because I lack experience and find very different figures on the internet. And my feeling is that there will always be something extra that one didn’t expect.

Therefore, I am at total costs of about:

Plot + incidental costs: ~€249,000
House + carport + photovoltaic + storage: ~€620,000
Incidental costs: ~€115,000
Total: ~€980,000

If I calculate the monthly rate for the bank loan, repayment of private loans, and repayment of the KfW300 loan at these costs, I already come to >€3000 per month, and this does not yet include incidental costs, maintenance reserves, etc. If I include these, I come to ~€3600 per month and our financing advisor said banks will not approve more because our income is too low for that.

We therefore really feel very poor and it is somehow frustrating to subjectively afford so little house.
Now my questions: Am I calculating too much incorrectly? Or are the demands simply too high and for house construction under 1 million you only get 120 sqm terraced houses?

I can contribute little to the house construction or the construction costs, but I have questions about the cost overview. Are the expenses €2700 plus €1400 warm rent, so €4100 in total? The equity should conservatively be invested in a daily allowance at about 3%, bringing in approximately €15,000 per year; was this considered in the income?

Edit: The 1400€ are not included in the 2700€. These are separate expenses which would then disappear with the house purchase.

The equity is invested (stocks, ETFs, daily money) and I am currently even calculating with 4% return per year for the coming decades. Unfortunately, this changes too little about the fact that the monthly burden becomes too high for the banks. It is possibly feasible to make the loans over longer terms, but since I am already 40 years old, I am reluctant to choose that option. I actually do not want to still be paying off loans in retirement. And the KfW300 with a longer term simply becomes less attractive quickly due to higher interest rates (even though they are still very good).

When I read this, I have my doubts. 1 million for a house, plus 2 children and a rather high, but ultimately average family income. Surely you have a lot of equity, but then you write that you live far away from friends and relatives anyway.

Try looking at it from the other side. Buy yourself a nice plot of land somewhere in East Germany where it is beautiful. Where your children are cared for in a very good kindergarten. Where you will easily and immediately get 2 places and pay no more than 200 euros for both. Where there are only German children. In a few years, you will have good schools, Saxony is number 1 in the education monitor.

You will immediately find a very good job with not such a high salary. But you don’t really need that.

You could even build your house without a loan for half the money. You have that much equity. We also moved from Nuremberg to Saxony-Anhalt. I found a great job. What annoys me is that I didn’t do it earlier.

Built a house without a loan and back then we paid 6 euros per square meter for developed land for our plot. But here you get good plots depending on the location between 20 and 50 euros.

Besides, my daughter goes to the best school in the state here. Private school costs 150 euros a month, but everything is new, there is a swimming pool at the school, a medical service, 2 teachers per class, and only 15 students per class. It is also obvious that they all speak German.

There is no more traffic jam, no crowded supermarkets, and I love the relaxed life of the Ossis.

You buy a plot of land for 50,000 euros, build yourself a little castle on it for 500,000 euros, take 200k equity and finance 300k. Then you perhaps pay 1000 euros a month and save a lot of other costs.

Before you tie such a load to your leg.

Financially, that would clearly be the best option, but we want to move closer to Stuttgart since the relatives come from there. It is just even less feasible financially than around Tübingen.

We have been searching in the existing market for 5 years, and here in the area, it is really frustrating with such a small income. Gut renovations are just as expensive as new builds, and the unsanitary old houses already cost > 400-500k€ alone.

We have also considered planned terraced houses and semi-detached houses, but these are always too small for us and have really odd layouts. Children's rooms of about 10sqm and only one level is a gallery. And only after buying the houses would a private remodeling of the rooms be possible, and then in the end, you end up with way too high costs again.

Has anyone had the same experiences and possibly tips on where we could save or how we might be calculating incorrectly?
For example, the green roof with elevation for the photovoltaic system already costs around 30-50k€ (depending on the offer). It might make sense to outsource these items or carry them out ourselves?

We really feel very poor because of this

With half a million in equity? You are really privileged compared to truly poor first-time home builders who don’t have such a cushion. Pure luxury.

Or are the expectations just too high and for a house build under 1 million you only get 120sqm terraced houses?

Of course, with you it also depends on the expensive land and – I’ll bet on it – on your expectations. If I build a house for a good 3,500€/sqm, then I am building very high quality (= expensive).

If I calculate the monthly payment for the bank loan, repayment of private loans, and repayment of the KfW300 loan at these costs, then I already get >3000€ per month

How are you calculating?
Why not put in 400k equity, look for a cheaper home provider, and don’t repay at all costs (10 years KfW = repayment in 8 years can be done if you can afford it – but your liquidity doesn’t look like that).

Private loan over 20 years: 625€
KfW over 30 years: 730€ (+/- depending on grace periods)
360k remaining loan: 1,500€
Total 2,850€ monthly.

==> you can easily reduce that to a 2,500€ payment with another house (a bit smaller, fewer demands).

Whether you can manage with the remaining 3,800€ you have to know yourself.

What are you doing with the 500€ child benefit? You also have to include that as income.

Maintenance reserves, etc. included.

Those are initially not necessary for new builds. You can set them up if you have money left over. But you can also only start them when the kids are in school and the daycare costs disappear. You have warranty on the house for the first five years, during which you don’t do any renovations/investments. And after that, there should be another 10-20 years where nothing happens. Only then can you think about spending money (unless you have to lay new parquet every 4 years or redo the bathrooms every 10 years following the latest trends). But everything lasts much longer. You don’t even have a heating system yet that can break down.
Roof: 40-50 years
Bathrooms/sanitary: Whenever you don’t like it anymore
Everything else: Whenever you don’t like it anymore
Technical issues: not foreseeable, since apart from photovoltaics/inverter, there is nothing left that can break and cause high costs