My DS is only 5, and he's not into castles, so my advice may be off the mark....
I looked up the Kinderkram wooden castle, and it does look beautiful. At over $200, it's also rather expensive. If he won't settle for a less expensive wooden castle, how about delaying the purchase? Have him save up his allowance (or bday/holiday money) to help defray the cost for you? Or explain that b/c it is so expensive, you'll have to save up for a few months before you can afford it? I'd think by his age he'd have some concept of money, and although nobody likes delayed gratification, until he's old enough to earn his own money, he's dependant upon your salary, and what you're able/willing to devote to his amusement. So if you both start saving now, maybe by the winter holiday, you'd have enough to afford it...and at that time, you can make sure he still wants it. If he does, buy it. If he doesn't, well, you've got a bunch of money saved up that you could put towards something else instead.
Would he be willing to make his own castle? (Out of cardboard/glue/tape/paint, or clay, or wooden craft sticks?)
My DS is a Lego freak. Over the past two years, we've spent hundreds of dollars on lots of small and medium-sized kits, and a couple of larger kits. We started giving him $1/week when he turned 5. He's currently saving up for a particular Lego kit...seven more weeks and he can buy it, all with his own money. If he doesn't still want that particular one in two months, there are plenty of others that he's interested in, although it might require saving up more allowance money first.
Back to the castle--as an adult, I'd have been thrilled if my son had been interested in castles. In fact, I'd gotten my hopes up that he'd want one of the Lego castle kits, or the medieval market one (so I could play with it, too); however, he just wasn't that interested. So if your son is still interested in castles at age 7, that tells me (as a mother of a 5 year old), that his interest is still going strong. However, by next year he could be totally over them. Or like me, he could remain interested in castles for the rest of his life. It's really hard to predict.
