Start a construction project, buy only the land or wait?

The probability that the temperature curves of medium-term price trends and the daily climate of the markets will produce a more favorable timing within the next five years, I would dismiss as wishful thinking. I see no reason whatsoever for a "rewarding" wait.

Now I could secure the contract for a plot of land through a sealed bidding process

Are there no subjunctive umlauts missing there? - because later in the thread the race does not yet sound decided ...

The only risk I take is the fact that I buy it at the price of 1.25 through the sealed bidding process.

That means you are betting to be the winning bidder with a premium of 25%?
Can it still be worth it under the premise that the family currently renting already provides a complete happiness without any wishes?

Regarding the comfortable situation, 1. not having to escape a dark narrow hole with the own home, as well as 2. due to lack of "poverty," and 3. already existing homeownership escaping through the meshes of the local resident model, surely most of your fellow suffering plot seekers will envy you.
[Correction: only most, not the very most - in fact, unfortunately many "of my" plot seekers have the "disadvantage" of not being considered needy by public care due to good education and corresponding income]

if you buy from a [Gemeinde], you have to give back to the [Gemeinde] at the purchase price. So you put real estate transfer tax and notary fees in the sand and not the 25% above market price. Solar, green roofs, and rainwater retention are now almost standard everywhere. Contrary to those who consider a drop in property prices possible, I think prices will not fall. You will be able to sell the house at any time for a higher price, as long as nothing exotic is installed. If necessary, already in the shell construction stage without loss. I wrote this in another thread, we have 50 applicants for one building plot, and 10 presumably have no problem paying even 150 or 200% of the square meter price. Sure, for houses over 1 million, the circle becomes smaller, but it is still there.

You are of course right. I'm not thinking that far yet, questioning individual items critically because it might get tighter. We went through all the items back then and already clustered them into Priority A, B, and C. For me, that belongs to proper planning.

The probability that the temperature curves of medium-term price trends and daily market climate will produce a more favorable time within the next five years, I would dismiss as wishful thinking. I don't see the slightest justification for "worthwhile" waiting here.

Aren't subjunctive umlauts missing there? – because later in the thread the race doesn’t sound decided yet...

So, you’re betting to be the winning bidder with a 25% price premium?

No, I was informed that I was the highest bidder and that I should submit the documents for notarization.
That makes it so difficult because I have to decide whether to finance the whole project now, or just the land first, or not at all. Therefore, I am currently really considering securing the land, getting the notarization and financing squared away, and then calmly advancing the house project. Basically splitting up the land and the construction project, since estimating the total financing volume is so difficult right now.

You are completely right about the rest. I don’t want to complain here. The opportunity to buy the apartment two years ago was like a lottery jackpot. We won’t fall through the cracks and there are families who are financially or simply due to housing pressure afflicted. Those are completely different circumstances. I am really grateful for the opinions, to examine some decisions from all sides. Not everything that is financially feasible is also sensible.

If you buy from a municipality, you have to give it back to the municipality at the purchase price. So you lose land transfer tax and notary fees but not the 25% above market price. Solar, green roofs, and rainwater retention are now almost standard everywhere. Contrary to those who consider a drop in real estate prices possible, I think prices will not fall. I

Here, about 15-30 applicants compete for one piece of land, i.e., the already screened and who really remain in the final round. The number of initial applicants is significantly higher. The pressure will remain high even in these times, although some projects may fall through the cracks. Regarding the municipality: The regulations are vague, but in the worst-case scenario I lose notary and land transfer tax, which is not even that bad because we also have the situation that existing properties are traded more expensively than new construction projects. At least when you calculate gross including land transfer tax and possibly brokers.

Maybe to generalize again: It is less about what is financially feasible at all, although budget limits are of course set, but about the sensible approach. I have difficulty preparing financing for the overall project under time pressure (land) when the costs on the house side can hardly be estimated reliably. Hence the idea possibly to secure the land first. That would take the time pressure off and the "big" financing would then concern the house project.

because I have to decide whether I now finance the entire project or initially only the land or not at all.

Didn't you say you could also pay for the land with equity? Then at least the time pressure would be completely off for now. Variable financing for the land would also work if you don't want to commit to the overall project yet. (As for the rest, I wouldn't know how quickly you could just whip that up. I guess it depends on how the overall planning currently looks?)

Conclusion: If I were you, under the given circumstances, I would complete the land purchase and start a new thread here (linked) where the conditions of the plot (and also the one that was planned) and the house design are shown. Then we can find out together where the construction project has potential for cuts or downgrades in order to ease the financing.

In contrast to those who consider a fall in real estate prices possible, I think that prices will not fall. As long as nothing exotic is built in, you will always be able to sell the house for more.

No, of course not – prices can never fall, interest rates never rise, and thanks to TINA, prices rise forever. History alone shows this, it has been exactly like this for 500 years.

Unfortunately, concrete numbers are missing here, especially regarding the ratio of land costs vs. house costs. There is already about 25% additional excess in the land, and since the municipality auctions it off, there will normally have been a significant markup included. Don't forget, the Bundesbank already saw up to 40% hot air involved around the house last year. The war in Europe plus Corona in China bring considerable additional temporary increases, which will no longer have to be paid in 5 years. The idea that you can then always exit anywhere at a profit is probably wishful thinking. Every bubble bursts, every boom ends – and the last ones usually fall the deepest.

The fact is that interest rates have risen sharply, and households are already coming under heavy pressure. Where additional price increase potential across the board is supposed to come from is unclear to me. We are only at the very beginning of the crisis, but no end is in sight anytime soon. In just 2 years, the first builds with a 10-year fixed interest rate and 1% repayment will be due (they had lower interest rates back then than now). They also thought they could always sell at a high price. It remains to be seen whether their household budgets can still cope with this, or whether there will be enough buyers willing to play along...