Unpredictability of construction costs - Will the project fail because of it?

We are facing the following dilemma.

A small single-family house of 125 sqm with a basement (due to the sloping site) is planned. The plot has already been paid for, our condominium was sold to get the loan approved. The financing is secured and was already signed in March. We signed the offer with a fixed price clause at the beginning of March. Actually, we are now about to sign the final contract, but we have already been informed that due to the current situation there will be a price increase for the extended shell construction, the fixed price guarantee will be canceled, and for later trades such as heating and electrical work no price can be given at all.

We did have a buffer, but it is almost entirely being used up by the price increase for the extended shell construction. Starting the construction now with all the incalculable costs is madness. However, we do not even know if and how we can get out of this situation with the construction company and the bank.

Planning the project smaller is hardly possible; we already have relatively little living space and no frills such as a ventilation system or smart home.

Maybe someone has a tip or advice, maybe like-minded people can be found.

A small single-family house of 125 sqm with a basement is planned (due to the hillside location).

Planning the project smaller is hardly possible, we already have relatively little living space anyway.

I just wrote something similar elsewhere: if you have to build a basement out of necessity, you should rethink all the house floor areas and possibly mix them. That a basement does not have to be a basement with a hillside is self-evident.
I assume you are planning a two-level house that totals 125 sqm. With the basement, you then have 180 sqm. Or something similar.
Include the basement level as living space and forgo the attic.
However: if you have already secured the financing, it is tied to the house. I wouldn’t know what to do about that now either.
Maybe forego the attic expansion? Whether all this is possible, you would need to take the entire planning into your own hands and talk openly with the bank and the disability insurance.
Like-minded people can be found here for example:

Have you ever talked to the bank? What do they say about it?

I just wrote it elsewhere in a similar way: in case of the necessity to build a basement, one should reconsider all the house floor areas and possibly mix them. That a basement does not have to be a basement on a slope goes without saying. I assume you are planning a house with 2 levels, totaling 125sqm. With a basement you then have 180sqm. Or similar. Include the basement as living space and forgo the attic. However: if you have already completed the financing, it is tied to the house. I wouldn’t know what to do in that case either. Maybe forgo the attic expansion? Whether all this is possible would require taking the entire planning into your own hands and speaking openly with the bank and disability insurance. Like-minded people you can find here, for example:

That would of course be an option, thanks for the tip!

Theoretically, we have the possibility with the bank to switch the property if the house or the entire property changes. But that has not yet been clarified.

One cannot assess your situation from a distance. However, it sounds like you are at a point with your considerations and actual preparations (including the sale of [ETW]) where, from my humble perspective, abandoning all plans would be the significantly more expensive and riskier option. As I said, no advice, but a thought I would have now: in case of doubt, refinance? Consider parents and grandparents for private loans? The market and conditions will not improve. There are also examples here in the forum of surprisingly stable prices despite the difficult situation. Hold on, keep fighting, and seek a conversation with the contractors.

Have you already spoken with the bank? What do they say about it?

We have not spoken with the bank yet. As mentioned, a property change would probably be possible. Otherwise, the regular prepayment penalties apply.