Most Germans don’t buy their homes, they rent • Hacker News Board

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

#171

Post by nommm-nommm » Mon, Oct 24, 2016, 6:32 PM UTC

Spooky23 wrote: post #152

cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

That's a ridiculous position. My ownership of my home provides a lot of active investment activity that wouldn't happen otherwise: Examples: - the local nursery benefits from the plants and growing materials that we buy - investments in home improvements generate contractor man-hours and local material purchases - as an active participant in stakeholder in the community, I contribute to the governance of the communit…

What's this have to do with owning? It's common to rent single family homes too. It's especially common in my part of the country because of the population here.

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

#172

Post by rsync » Mon, Oct 24, 2016, 6:34 PM UTC

huherto wrote: post #155

randiantech wrote: post #90

Earlier quoted context omitted.

So are you recommending to invest savings on stocks and bonds rather than a house? I mean, I wont argue / refute you reasoning, I just simply dont have the knowledge to do a proper analysis. Ill just say that my 78 years old parents, that not even finished high school, always told me to first buy a house, then think about the rest. Being an owner feels like the best decision Ive ever made. If something happens to me,…

> So are you recommending to invest savings on stocks and bonds rather than a house? I don't think he is saying that. As an individual it may be better to invest in the house. Depending on many individual factors. e.g. Capital gains, timeframe, etc. What I think he is saying is that collectively it is better for society that more people invest in productive activities that generate new wealth.

"What I think he is saying is that collectively it is better for society that more people invest in productive activities that generate new wealth."

It's incredible that we've gone this deep into thread and subthread talking about aggregate economic benefits and not once mentioned families and children.

Never mind the plants you're buying at the nursery - what is the long range economic impact, in the aggregate, of creating additional human beings ?

(which, according to many, works best in a stable environment of ownership)

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

#173

Post by pjmlp » Mon, Oct 24, 2016, 6:36 PM UTC

petra wrote: post #82

mto wrote: post #19

Earlier quoted context omitted.

Same for Austria. Then considering that you might change jobs every few years... and the jobs are mostly in the cities, where you can't afford building a house. We live in a small to medium size flat for 380€/month, including some running costs. Buying it would cost roughly 250k. That just doesn't pay off. Most medium sized houses are about 700k€ in the region, with typical software developer wages at 2-4k€/month bef…

So what happens to people when they are old , and maybe they're pension isn't that good ?

Sadly they might land in the streets, if they don't have a family to support them.

But this can also happen if you own a house, because there are running expenses for municipal taxes, validating the plumbing every X years, renewal of the boiler system before every winter starts, cleaning the snow or paying someone to do it....

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

#174

Post by kodablah » Mon, Oct 24, 2016, 6:37 PM UTC

kgermino wrote: post #164

Spooky23 wrote: post #152

Earlier quoted context omitted.

That's a ridiculous position. My ownership of my home provides a lot of active investment activity that wouldn't happen otherwise: Examples: - the local nursery benefits from the plants and growing materials that we buy - investments in home improvements generate contractor man-hours and local material purchases - as an active participant in stakeholder in the community, I contribute to the governance of the communit…

How does anything on your list stem from owning vs renting? Presumably if you were renting - you would still garden and you or your landlord would still maintain the lawn - your landlord would still maintain the house - you would still be living in the community and therefore motivated to participate in it's government - I don't understand this one at all. Why would a second family suddenly move in if the house was r…

Your points miss both the financial incentive to make things better for your own asset and long term incentive since oftentimes renting makes one more nomadic. Point by point:

- You might not garden w/ no equitable return on house value (or at least not build a large gardening setup), and landlords feel the same way in reverse (no benefit to them to do anything beyond the minimum once it's inhabited)

- Maintain != improve...BIG difference

- Except you may be more nomadic. Also you missed the GP's use of the word "stakeholder" of which you are considerably less of if you don't own land in the community

- I too don't understand this point...but I think the GP means "multi-family" as in apartments, thereby single-family (i.e. standalone house) is higher "premium" therefore you contribute more. Again, not sure here.

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

#175

Post by mtw » Mon, Oct 24, 2016, 6:38 PM UTC

coldtea wrote: post #117

Xixi wrote: post #96

Earlier quoted context omitted.

I don't know many people who use credit cards in France. Practically everybody use the so-called CB which is a debit card (either immediate or deferred, usually deferred), not a credit card. It doesn't allow you to accrue debt: the balance is always re-paid in full, and the linked bank account (usually a checking account) will go red in case of overspending. That said there are definitely credit cards, usually linked…

From what I see, most people use the CB, but: "Euromonitor International, a market research company, estimated that there were just 34 million French credit cards in circulation" (0.5 per person, in contrast the US has ~4 cards per person). Average credit card spending per French annually is $300 -- so quite insignificant compared to Americans (which would be almost half their annual salary if not more).

A credit card in France is not the same as a credit card in the USA or Canada. In France, a purchase paid with a VISA/Mastercard is taken directly from your checkings bank account.

Yes it is called "carte de crédit" i.e. credit card but when you think about it, it is not actually credit.

In Canada, paying with VISA/Mastercard is considered as credit i.e. debt. You can pay with VISA even if at the present moment, you do not have the cash in your bank account. Banks, VISA and others like this because they will then be able to charge you 25 to 35% of the amount at the end of the month if you do not pay in time.

It does not matter then to compare average spending or number of transactions since it's two different meanings.

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

#176

Post by Normal_gaussian » Mon, Oct 24, 2016, 6:39 PM UTC

aianus wrote: post #146

Normal_gaussian wrote: post #28

The only liberty that renting provides is the protection from the whims of the housing market. Aside from that it takes liberties right left and centre. I cannot structure my house and life as I want from painting and shelving through pets and kitchen appliances. I cannot fix something without causing a hassle and days off work. I cannot register a business here. I am at the whim of my landlord. Renting in the UK is…

It gives you the liberty to move for a better job. That's enormous when you're early in your career and switching jobs results in huge pay increases. Even within the same city, it's really nice to move near your new job and not have a commute.

I don't see that this is a real problem for ownership. You can sell the house and buy another.

Sure its more complex than simply giving notice and leaving but it isn't hard.

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

#177

Post by Normal_gaussian » Mon, Oct 24, 2016, 6:44 PM UTC

imtringued wrote: post #79

Normal_gaussian wrote: post #28

The only liberty that renting provides is the protection from the whims of the housing market. Aside from that it takes liberties right left and centre. I cannot structure my house and life as I want from painting and shelving through pets and kitchen appliances. I cannot fix something without causing a hassle and days off work. I cannot register a business here. I am at the whim of my landlord. Renting in the UK is…

On the other hand it eliminates the NIBMY problem. Since the tenants do not own their home they don't have the pressure to protect their investment. The landlord receives returns on his investment through rent on a monthly basis which lessens the risk of a sudden development reducing the value of the home. Home owners that live in their own home on the other hand face the full risk since they can only recoup their co…

Which introduces the problem of "Whatever, it isn't my mine I will just move away when the area gets shit" leading to lower quality stock.

On my current street, opposite the flats further up, there is regular fly tipping and various illegal activities. The fly tipping can take weeks to be dealt with as nobody rings the council (I've started emailing the council when I notice it, but I don't walk that way often).

Renters just don't have enough skin in the game to maintain the communities.

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

#178

Post by umeshunni » Mon, Oct 24, 2016, 6:45 PM UTC

ghaff wrote: post #131

kbart wrote: post #103

Earlier quoted context omitted.

"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.

Not to mention that, at least in the US, most owned homes are single-family homes in the suburbs and the rental market for those is significantly different than a flat in the city.

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

#179

Post by enraged_camel » Mon, Oct 24, 2016, 6:45 PM UTC

dagw wrote: post #54

burkaman wrote: post #44

Earlier quoted context omitted.

This is pretty popular in the US. Most recent college graduates I know live in a shared house or apartment.

Popular by choice or financial necessity?

Some of it is by choice. From what I've seen, even people who can afford living on their own eventually get roommates once they realize that it's hard to meet people and make new friends post-college.

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

#180

Post by Spooky23 » Mon, Oct 24, 2016, 6:45 PM UTC

kgermino wrote: post #164

Spooky23 wrote: post #152

Earlier quoted context omitted.

That's a ridiculous position. My ownership of my home provides a lot of active investment activity that wouldn't happen otherwise: Examples: - the local nursery benefits from the plants and growing materials that we buy - investments in home improvements generate contractor man-hours and local material purchases - as an active participant in stakeholder in the community, I contribute to the governance of the communit…

How does anything on your list stem from owning vs renting? Presumably if you were renting - you would still garden and you or your landlord would still maintain the lawn - your landlord would still maintain the house - you would still be living in the community and therefore motivated to participate in it's government - I don't understand this one at all. Why would a second family suddenly move in if the house was r…

Residential properties usually have short term leases. You have minimal incentive as a tenant to plant flowers, buy shrubs, etc. You have minimal inventive as a landlord to make the house look any more attractive than it needs to be.

Landlords don't maintain property to the same standard as an individual homeowner, when they do, they use more efficient service models (ie. a single crew with a single set of tools) to do so.

Tenants participate less and have much lower engagement. They have 1 year leases, and have less at stake. In my community, renters participate 60% less in terms of voting. There are 150 members of my local neighborhood association, and per a recent survey, 90% of participants are homeowners. They mostly solicit membership by dropping flyers and advertising in church bulletins. Per census figures, the population of renters is somewhere between 60-70% vs. homeowners.

The last point is that without homeownership, incentives shift to multi-family dwellings because they are cheaper and more efficient. Single family homes for rent are usually an aberration in my experience. As a homeowner in a city that is mostly rentals the per-unit taxable value of a multi-family house is significantly less than a single family.