
New construction during the crisis? When building is still worthwhile
The housing 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. Rising construction costs, higher interest rates, and a shortage of skilled workers, as well as unpredictable changes in the framework and subsidy conditions, are making things difficult for those wishing to build.
Why building a new home can still be worthwhile
Although the costs of new construction have risen since 2022, a comparison with the level in Germany 40 years ago shows that it is actually easier for builders to finance a construction project today. This was recently confirmed by a study by the German Institute for Economic Research 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 largely stabilized between 3.5 and 4.5 percent.
Housing, on the other hand, will remain a scarce commodity in the future. That is why investing in residential property is an investment in the future, even in difficult times. Those who live in their own four walls secure their independence from the rental market in the long term. 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 not necessary in the long term. It should also be noted that construction costs vary greatly between urban and rural areas. According to Corinna Merzyn, owner-occupied homes have become significantly more expensive, especially in sought-after metropolitan areas.
How to build a new home despite difficult conditions
For families who do not want to put off their dream of owning their own home, moving to the suburbs is an option. This is because financing costs can be kept moderate here. Consumer advocates recommend that those with a limited budget consider downsizing or choosing an alternative location and letting go of certain dreams.
Take advantage of subsidies
In addition, builders in this country have a range of subsidy options available to them. For example, the Kreditanstalt für Wiederaufbau (KfW) grants home ownership loans. The federal government promotes low-interest home loans for families and environmentally friendly new buildings. In addition, many federal states offer separate subsidy programs. Anyone who wants to fulfill their dream of owning their own home despite the turbulent times should take full advantage of these opportunities. In addition, the support of a local real estate agent can help interested parties find a solution that is right for them.
Are you looking for a home and still unsure which type of housing is best for you? Contact us! We will be happy to advise you.
Notes
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as 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 case.
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