New build in the crisis? When building is still worthwhile

According to general reports, most people are currently unable to afford their own home. Corinna Merzyn from the Association of Private Builders complains in an article for the MDR a real slump in the market. What are the reasons for building a new home? And how can it succeed despite the high costs?

The residential and real estate market will remain under pressure in 2024. The construction industry is also facing increasingly difficult conditions as a result of this development. Increased construction costs, higher interest rates and a lack of tradespeople, as well as unforeseeable changes in the framework and funding conditions, are making conditions more difficult for those looking to build.

Why a new build can still be worthwhile

The cost of a new build has risen since 2022. But if you compare the level in Germany with 40 years ago, builders today actually find it easier to finance a building. This was also recently confirmed by a study by the German Economic Institute in its Affordability index. Compared to the crisis in 2022, it can be observed that the rise in construction prices has already slowed down and interest rates have also largely leveled off between 3.5 and 4.5 percent.

Housing, on the other hand, will continue to be a scarce commodity in the future. This is why investing in residential property is an investment in the future, even in difficult times. Living within your own four walls ensures long-term independence from the rental market. Last but not least, builders benefit from being able to design their new home according to their own wishes. In addition, the latest building standards are taken into account and costly renovations are no longer necessary in the long term. It should also be noted that construction costs differ greatly between urban and rural regions. According to Corinna Merzyn, homes have become significantly more expensive, especially in sought-after metropolitan areas.

How new construction succeeds despite difficult conditions

For families who do not want to postpone the dream of owning their own property, moving to the outskirts of cities is an idea. This is because financing costs can be kept within moderate limits here. Consumer advocates recommend possibly switching to fewer square meters or an alternative location if the budget is limited and saying goodbye to certain dreams.

Use subsidies

In addition, home builders in Germany have a range of funding options. For example, the Kreditanstalt für Wiederaufbau (KfW) grants home ownership loans. The federal government promotes low-cost home loans for families and for environmentally friendly new builds. In addition, many federal states offer special subsidy programs. If you want to fulfill your dream of owning your own home despite the turbulent times, you should also take full advantage of these opportunities. In addition, the support of a local estate agent can help prospective buyers to find the right solution for them.

Are you looking to buy your own home and still unsure which form of living suits you best? Get in touch with us! We will be happy to advise you.

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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