Opportunities for municipal land, experiences?

Most interested parties already considered the 60-year-old house "too old"

That is a problem in rural areas. At that age, without renovation, you have terrible energy efficiency and thus have caused an immense loss in value over recent years. Such a shack is a slow seller everywhere, unless located in a metropolitan area. Regardless of whether it is leasehold or full ownership.

the banks valued it very low because of the age

Based on the condition. This is initially independent of the age. My current property is from the 60s and is valued like a new building (because renovated).

and for demolition or major renovations, the leasehold option was ultimately too uncertain for most.

Another confirmation of the condition of the property.

Leasehold land with 40 years remaining,

Banks finance so that the loan repayment must be completed 10 years before the leasehold expires. So still all within limits. Conclusion: "junk property," but the leasehold is to blame for the poor sale. P.S. Most leasehold contracts include direct extension options for the leaseholder. There is also the contractually stipulated compensation at expiration if it is not extended. So you do not simply lose your house but receive the equivalent value in euros. Therefore, most leaseholds are not extended after the term, as there is usually no money to take over the property, or it simply does not fit the business model of the leasehold issuer.

Most interested parties already found the 60-year-old house "too old" and the banks valued it very low due to its age, and for demolition or major renovations, the leasehold option was ultimately too uncertain for most.

But this is not a leasehold problem, rather that an unrenovated property always suffers value deductions. As an owner, you simply cannot ignore that the value consists of the property plus the land, and with leasehold, rent has to be paid. If you do not maintain a house, it naturally loses value.

So, as far as I know from my colleague's complaints, the house was not a wreck. Heating completely new a few years ago with underfloor heating. Bathrooms new, exterior insulated and triple-glazed windows. He had imagined that he would sell the house quickly at a good price because of that. But in terms of layout and decor, everything very traditional.

P.S. In most leasehold agreements, there are direct extension options for the leaseholder. There is also a contractually agreed compensation upon expiration, provided it is not extended. So you don't simply lose your house, but rather receive the equivalent value in €. In this respect, most leaseholds are not extended after the term because usually there is no money to take over the property or it simply does not fit the business model of the leasehold grantor.

I read somewhere that in the case of compensation only 2/3 of the house value have to be paid. That is not really reassuring.

I read somewhere that in case of compensation only 2/3 of the house value have to be paid. That is not really reassuring.

No. According to the ErbbauRG it is 100% - although, of course, other arrangements can be made contractually. There is an exception if the hereditary building right was established for "low-income" people, then the minimum (!) amount is 2/3 - this serves to protect the entitled persons (contrary agreements in the hereditary building rights contract are then void). This would basically be social housing under hereditary building rights. Maybe your 2/3 come from this minimum amount.

So far as I know from my colleague's complaints, the house was not a wreck property. Heating completely new a few years ago with underfloor heating. Bathrooms new, insulated outside, and triple-glazed windows. He had therefore imagined that he would sell the house quickly at a good price. But in terms of layout and decor, everything was very traditional.

You probably only know his complaints, but not the true story. Maybe your colleague’s "almost giving it away" is a good price because his price expectations were somewhere beyond good and evil? Concrete figures would be nice.

If I sell my iPhone 12 for €270, I might also say that I "almost had to give it away," because I actually expected €500 on a former purchase price of €1,000. It's all relative.

But a decent house in a decent location still gets a decent price today – even as a leasehold property.