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Most Germans don’t buy their homes, they rent

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Re: Most Germans don’t buy their homes, they rent

#131

Post by ghaff »

kbart wrote: post #103
whack wrote: post #39

The Germans seem to be far ahead of the curve here. From a financial planning perspective, buying a home results in: 1) The vast majority of your assets becoming concentrated in a single plot of land, in a single neighborhood, in a single city 2) Your future mobility to pursue jobs in other cities, becoming significantly constrained If you want to invest your savings, then invest them in the stock/bond markets. If yo…

"2) Your future mobility to pursue jobs in other cities, becoming significantly constrained" Not necessarily. I can always rent out my flat for about the same monthly fee I pay for mortgage and rent a flat myself in other city/country in case of a good job opportunity. Sure, being in a debt for few decades has many drawbacks, but restricted mobility is not one of them.

It still reduces mobility vs. just renting though. Now you're a landlord and probably dependent on the rental income to pay your rent in the other city/country. Obviously, it's all doable. But it's clearly a constraint (even if it's a worthwhile one) relative to not owning.

Re: Most Germans don’t buy their homes, they rent

#132

Post by usrusr »

pyb wrote: post #16

Who owns most of the homes then ? Institutional investors ?

Your typical landlord is someone who bought a unit or two as a personal investment, or who was lucky enough having ancestors who did so (in this case it might have grown into a full time commercial operation through decades of reinvestment). New developments, even quite large ones, tend to target this kind of investor because a big institutional one would be much more capable of telling a good investment from a bad one. This does not even matter so much to the small, private investor, because he mostly uses it to hedge against a collapse of the financial system, something that indirect investment in real estate cannot provide.

An exception are (formerly) communal companies, companies that have been spun out of "company town" arrangements and of course those that operate formerly "people's owned" buildings in the east. But all those are not really into expanding.

Edit: and one thing I forgot: some units are actually owned by renters. Liking the solidity of a real estate investment and liking the flexibility of living in a rented property that you can easily swap for a different one are not mutually exclusive. For example it ie not terribly uncommon for occupant owners who need to move or scale up or down to keep their property and rent both ways (e.g. when they know that their new demand is not permanent or when their new demand does not match their investment volume).

Re: Most Germans don’t buy their homes, they rent

#133

Post by filmor »

SyneRyder wrote: post #119
Noseshine wrote: post #26

Earlier quoted context omitted.

From the PoV of someone who once co-owned a small business in Germany that accepted card payments: The reason they are "evil" is that they charge the dealer the by far largest fees. Cache: no fee. EC card: small fee. Credit card: large fee. And of course I can't ask the customer to pay for it, I must have one price for all. It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). It's no…

That's really intriguing. The fees you're describing are the same in Australia (2.9% on AmEx) and don't seem particularly evil at all. A few stores do charge a credit card surcharge here, but the majority of retailers don't anymore. As a near-annual visitor to Germany, it drives me nuts that I can't use my Australian credit card everywhere (especially at Saturn). I would LOVE to have an EC card, but it seems there's…

Since last year Saturn and MediaMarkt (basically the same company) apparently allow payments via Visa or MasterCard ;)

Re: Most Germans don’t buy their homes, they rent

#134

Post by premium-concern »

0xcde4c3db wrote: post #21
premium-concern wrote: post #6

Earlier quoted context omitted.

Yep. "Don't buy things if you can't pay for then." sounds reasonable, but some other countries seem to disagree. Not surprised that those countries suffer from government shutdowns over how much the debt ceiling is raised.

In the US, at least, the shutdowns don't have much to do with our actual spending/borrowing habits. It's a structural quirk of government operation that provides a handy perennial disaster to use for political brinkmanship and finger-pointing. Basically "if you don't start being reasonable by caving to my demands, then you're going to cause a government shutdown".

> political brinkmanship and finger-pointing

The difference is that parties that try to pull that in Germany not only loose elections, but are punished so hard by voters that they can't even get over the necessary 5% requirement in the next election.

Have a look what happened to the FDP after they pushed through lower taxes for hotels.

Re: Most Germans don’t buy their homes, they rent

#135

Post by burkaman »

LeanderK wrote: post #85
ricksplat wrote: post #52

Earlier quoted context omitted.

That's all well and good as long as you're a student, or partying your twenties away and as long as everybody in the house gets on .... I've done this, and while it is good fun in parts the downsides become downright tiring.

i recently searched for a new shared apartment and there were plenty of offers that were looking explicitly for professionals and not students because of the reasons you stated above. I also know of older ones living in a shared apartment (though not as a rule). I can imagine moving together with a partner or switching apartment because of the reasons you mention above, but living alone is not something i want to do.…

In the US I think it is still a necessity for many people because a lot of cities are so expensive, but if money were out of the picture I do think a lot of people would still choose to live with their friends.

Re: Most Germans don’t buy their homes, they rent

#136

Post by thatfrenchguy »

coldtea wrote: post #48
thatfrenchguy wrote: post #18

Earlier quoted context omitted.

Never seen credit cards outside of the US/UK/Canada...

They are used all over the world, including in France. Not sure what are you talking about... Except if you live in some rural area...

I meant people use debit card instead. Sure, I can use my us credit card in France after te weird you-need-a-signature-? look, but no-one has credit cards there :-)

Re: Most Germans don’t buy their homes, they rent

#137

Post by premium-concern »

cylinder wrote: post #89
tksap wrote: post #22

Earlier quoted context omitted.

You buy the car you can afford. I would only take a credit if I wanted to buy or build a house.

In 2014, 27% of all car purchases in Germany were financed.

Which includes leased company cars. So yes, people don't finance their cars.

Re: Most Germans don’t buy their homes, they rent

#138

Post by standel »

bryanlarsen wrote: post #104
standel wrote: post #42

It's an interesting article. I'm from Belgium, one of the highest house owners countries. Even though it's true it's a life-long debt and it might be risky (in case of crisis), housing is still considered as a Long Term Investment so that you can pass that investment to your children (after heavy tax deduction :)). I find interesting the article does not mention who actually owns all these houses and who benefits in…

> renting has a guaranteed zero ROI If rent < mortgage interest + other housing sunk costs and you invest the delta, renting can have a substantially higher ROI than buying.

You still need to rent something for you and your family. It's almost a fixed cost in your life. In any case, it's better to turn that fixed cost into an investment. It's hard to believe you'll ever get your equation right. Even more when you weight investment risks and actual average ROI over 25-30 years in stocks.

Re: Most Germans don’t buy their homes, they rent

#139

Post by premium-concern »

rmc wrote: post #64
LeanderK wrote: post #29

I am a German CS-Student and currently renting in a shared flat with 4 other students. We call it WG (living-community) and its really popular not only with students, but i know a lot of young professionals and even middle aged ones that share an apartment (it gained popularity in the 60s, so i think its more of an culture thing that older do not share a flat). If you are in a partnership, you can move out and share…

> Serious question: Why is it not very popular in other countries? Because some countries have much, much worse tenants rights. I moved from Ireland to Germany and in Ireland: * There is basically no protection for rent increases, some people are being told their rent is increasing by 50% * Can't change your apartment. Not allowed to paint the walls, nearly all come with furniture, better make sure you don't damage a…

In Germany:

- Rent increase limits

- Larger changes need landlord's approval (changing walls and stuff). A lot of smaller stuff can be done on your own and doesn't require asking the landlords. (Many landlords are happy if you want to paint the walls etc., though.)

- Only smaller apartments (often intended for students) come usually with furniture

- The deposit has to be put on a special, locked bank account. The money can only been withdrawn if both sides tell the bank in writing that the rent contract is over

- Depends on the size of the pet

Re: Most Germans don’t buy their homes, they rent

#140

Post by SyneRyder »

filmor wrote: post #133
SyneRyder wrote: post #119

Earlier quoted context omitted.

That's really intriguing. The fees you're describing are the same in Australia (2.9% on AmEx) and don't seem particularly evil at all. A few stores do charge a credit card surcharge here, but the majority of retailers don't anymore. As a near-annual visitor to Germany, it drives me nuts that I can't use my Australian credit card everywhere (especially at Saturn). I would LOVE to have an EC card, but it seems there's…

Since last year Saturn and MediaMarkt (basically the same company) apparently allow payments via Visa or MasterCard ;)

Oh awesome! I didn't get to visit Germany this year so I missed that news... this will make stocking up on my Rammstein / Oomph / Unheilig CDs so much easier next time :D
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