The inflation rate is high, real estate prices even higher – and interest rates are also rising. Fewer and fewer people can afford to build a house. Get a loan? It’s getting harder and harder at the moment.
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Expensive building materials and even more expensive land
In the case of the two banks, however, this is less due to the financing conditions. Rather, the shoe pinches in other places: building materials have become enormously expensive. Construction companies no longer build at a fixed price. There are long waits to get artisans. And the prices for land are exploding, says Imke Gernand, spokeswoman for the Sparkasse Südholstein.
Building a new house is therefore currently a risk for private individuals in terms of time and costs that is difficult to calculate. “It’s a risk that some don’t want to and/or can’t take,” says Gernand.
Jasmin van Gysel, press spokeswoman for VR Bank in Holstein, can also confirm this: “We are finding that we have to tell more customers than before that they cannot afford to buy a house or build a new one. We’ve also noticed that customers don’t always want to afford it anymore either.”
Do not define wishful thinking too narrowly
So what can you do to be able to fulfill your dream of owning your own four walls in the near future? “Don’t define your own ideals too narrowly,” says Gernand. A fireplace or a brand new dream kitchen, for example, could only be purchased after a few years. A solid basis is important – in other words, roof, insulation, windows, heating and room layout.
What is also important according to Sparkasse and VR Bank: start saving early. It is best to put some money aside regularly if nothing else needs to be bought at the moment. Everything that is already there in terms of equity no longer needs to be financed. But customers sometimes need a lot of patience for this. Accumulating a certain amount of equity can take years, says van Gysel.
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Definitely bring ancillary costs with you
Every euro makes sense. You should have at least 20 percent equity. “The guideline is still correct,” says Gernand. But: In today’s time for many difficult to reach. “The acquisition costs (all costs that are directly related to the purchase of a property Anm. d. Red.) but you should bring it with you in order to have a realistic chance of getting financing,” says Gernand.
Cost no more than 40 percent of income
Everything is getting more expensive, but wages remain the same for most people. In order to be able to pay off your own home and still make a living at the same time, the costs should not account for more than 40 percent of the household income. “33 percent or less would be even better. You might want to go on vacation again,” says Gernand. The financing can be compared to cold rent. There are also ancillary costs and reserves for possible repairs.
When it comes to interest, does the four come before the decimal point?
Interest rates for building loans are currently between 2.9 and 3.5 percent. The Sparkasse Südholstein assumes that this year there will still be a four in front of the decimal point.
At VR Bank, they don’t want to be too specific just yet. “It’s still a look into the crystal ball,” says van Gysel. Even if it is quite possible that interest rates will be between 3.5 and four percent by the end of the year.
