Question regarding the feasibility of financing

I always find these posts very interesting. I can't contribute much, but I still wanted to share my perspective. Because everything is always a matter of perspective. As someone who built in a structurally weak region, land prices of 1000€/sqm are simply unimaginable. But "you over there" just earn more. With the typical income levels here, more than 200€/sqm is practically already "borderline."

Five years ago, I bought an Audi from a factory employee in Eichstätt (30 km before Ingolstadt), where there was still a free plot. When he said a house was going to be built there, I was a bit surprised because it looked so tiny (about 350sqm or so). When he then mentioned 2000€/sqm, I thought he was joking.

So you really just build a house in order to have a house. The garden, if you can even call it that, is practically a communal garden, because all the neighbors are an arm’s length away. You basically have to keep the Corona distance even in your own garden.

In this respect, I can understand the decision to prefer renting first. Actually, many early retirees from high-income regions like Baden-Württemberg or Bavaria buy/build here. Probably because they want to rent first and rather save some money and then build their affordable dream house here.

Huh? I don't quite understand the discussion. Of course, you can get upset about the prices. But then I can also go to the jeweler and get upset that the 5-carat diamond ring is so expensive! For me, it’s not a diamond ring if it’s under 5 carats. Who is supposed to be able to pay for that anymore? Alternative: smaller diamond or different stone. Land is a scarce resource. Especially in cities. In economically strong regions, everyone wants a plot in the city. -> high demand -> high price. Who can afford it? Heirs and real high earners. What are you supposed to do about it? Legal restriction of the purchase price? Then there will be a lottery among fewer than 100 interested parties who can afford it. In the end, you don’t get anything out of it either. We would have liked to build in Düsseldorf too. It didn’t work. The commuter belt gets bigger every year. So now we are building on a beautiful 730 sqm plot 40 km away from Düsseldorf. Those who accept reality and adapt usually reach their goal faster. But if renting is better for you: that’s fine too! Just don’t be surprised if in 5 years Pinzberg suddenly seems quite okay. But the price for the land will then be 400,000 euros.

I completely agree with . Either I want to live in the city and accept that I only have a comparatively small plot of land available (if any at all), or I move to the countryside and get a large but still affordable plot. I would have about an hour's drive to Erlangen, and here there are 1000sqm plots for €50,000. Now I could decide whether to accept the commute and, as an average earner, build a nice house on a large plot, or whether I prefer to be right on site and accordingly have to downsize the property. It always remains a question of one's own priorities.

Well, I only agree with you to a limited extent.

a) There are many cities that have all the advantages of a city but still have affordable prices. If income were paid according to the city instead of the federal state, I would agree. But as it is, it’s not as generalized into city vs. country as you are presenting it now.

b) The comparisons are greatly misleading. Anyone, even a low earner, can pay off a diamond or a car in 20 years if they want to. Sure, you have to save a bit, but it’s doable. And if you can no longer pay, you don’t lose your home. So, it’s something completely different.

So don’t compare apples and oranges.

Regarding Pinzberg and co.: Of course, but if in 5 years I have to pay €400,000 instead of €300,000, then that’s just how it is. I accept the risk at that scale. If I buy now for €1.2 million and HAVE to sell in 5 years (moving, can’t pay the installments because of illness or similar) and lose €300,000 (similar in percentage to the increase from 300 to 400), because the market simply does not grow further, then that is a much, much bigger problem (especially in that situation).

And about the earnings: they are not higher in the city of Erlangen. Siemens and co. pay according to the collective agreement. This applies throughout Bavaria. With only minor adjustments throughout Germany. And this adjustment does not correspond to the difference in land prices. Not even remotely.

Cities are always more expensive than the countryside.
In the affordable cities you mentioned, prices in the surrounding countryside are much lower.
And even in affordable cities, scarcity of space applies.
If this were not the case, you probably wouldn’t want to live in that "city" either. Because there is just as much going on there as in the villages, where you don’t want to go.

You didn’t understand my comparison with the diamond ring. It was meant to illustrate how pricing occurs with scarce goods. Not to answer the question of whether you can eventually afford a €200,000 diamond ring through lifelong saving.

Regarding income: maybe it is the same throughout Bavaria. But still, most people want to live in the city in a detached house on 1000 sqm.
You’re not the only ones there.
Supply and demand determine the price.
In the East, the inheritance rate is also significantly lower than in Bavaria. That also drives prices.

Well, I only partially agree with you.

a) There are many cities that have all the advantages of a city but still affordable prices. I would agree if the income were paid by city instead of by federal state. But the reality is not as black and white regarding city vs. countryside as you portray it now.

b) The comparisons are hugely misleading. Anyone, even a low earner, can pay off a diamond or a car in 20 years if they want to. Sure, you have to save a bit, but it’s possible. And if you ever can’t pay anymore, you don’t lose your home. So, it’s a completely different matter.

So don’t compare apples and oranges.

Regarding Pinzberg and so on: Of course, but if I have to pay €400,000 instead of €300,000 in 5 years, then that’s just how it is. I accept the risk at that scale. But if I buy now for €1.2 million and HAVE to sell in 5 years (move, can’t pay the installments due to illness, etc.) and lose €300,000 (percentage-wise similar to the increase from 300 to 400) because the market simply doesn’t grow further, then that’s a much, much bigger problem (especially in that situation).

And about earnings: they are not higher in the city of Erlangen. Siemens and others pay according to the collective agreement. This applies throughout Bavaria. With only minor adjustments throughout Germany. And this adjustment does not correspond to the difference in land prices. Not even close.

They pay according to IGM Bavaria, so more than that is actually not possible in Germany as a collective agreement employee. For me, it somehow correlates. There are simply many more people who bring home €100k gross per person. Multiply that by 2 or 1.75 (because of children), and that already adds up to a decent net income. In that case, 3-4k installment payments are no problem, and with that you can basically arrange something decent in any large German city (with a few exceptions).