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

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

#61

Post by kriro » Mon, Oct 24, 2016, 1:25 PM UTC

webkike wrote: post #23

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.

Using credit cards does not preclude being able to afford the thing you are paying for. I regularly use my credit card for every day purchases despite having ample money in my checking account. The regular payments allow me to develop a good credit history without much worry.

Why can't you use a debit card for that? Isn't having enough money in your checking account to reasonably afford all stuff you need to live basically proof of a good credit history? Isn't the best credit history one where you never need credit in the first place?

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

#62

Post by dagw » Mon, Oct 24, 2016, 1:25 PM UTC

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…

Working long and then coming home into an empty, dead, dark apartment with no one to talk to.

For me that is by far my dream scenario after a day at work.

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

#63

Post by dejv » Mon, Oct 24, 2016, 1:26 PM UTC

pyb wrote: post #16

Who owns most of the homes then ? Institutional investors ?

Not sure if this is case in Germany, but in many european countries there are huge property holdings owned by cities or goverment.

In my case (Brno, Czech rep.) the city is by far largest landlord, holding double digits of available housing. Most of those places have very low rent, but it is hard to get the place.

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

#64

Post by rmc » Mon, Oct 24, 2016, 1:26 PM UTC

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 any of it.

* Oh the landlord/landlord's relative wants to live in the apartment. Eviction time for you.

* You give your landlord your deposit. Let's hope they can find it again if you move out.

* By default, no pets allowed. And many landlords will say no.

* Did I mention about the rent increases?

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

#65

Post by camiller » Mon, Oct 24, 2016, 1:26 PM UTC

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…

Buying stock on the open market also doesn't create any job for anyone, it just transfers wealth to the hands of the seller.

Basically, unless you are investing in an IPO, the company doesn't see a dime from the ongoing trading of it's stock. So the vast majority of investors are not creating jobs by buying stock. Similarly, most bond investors are not buying new issue bonds, they are buying bonds from the current owner of the bond.

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

#66

Post by bogomipz » Mon, Oct 24, 2016, 1:27 PM UTC

DocTomoe wrote: post #2

Being German I want to pPoint out that the article leaves out one cruicial detail: Building your own home puts you into debt for quite literally the rest of your life. We do not like debt.

There are two way to look at what you are calling "debt" though. In the United States you are allowed to write off the interest on your mortgage from your taxes. This often has the effect of making what you pay for housing every month either cheaper or very close to the same amount you would pay to rent a house.

Housing is a constant expense. If you rent practically speaking you are in debt to your landlord every month. In the US and many other countries on the list where home ownership is prevalent although you are in debt to the bank you are also paying yourself in a round about way in the form of equity(principal) that you have in the house. So you are actually saving rather than spending which is generally financially conservative.

As the poster above you mentioned Germany doesn't incentivize home ownership via tax breaks and I think thats the key difference.

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

#67

Post by kriro » Mon, Oct 24, 2016, 1:28 PM UTC

thesimon wrote: post #13

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.

>suffer from government shutdowns over how much the debt ceiling is raised On the other hand: The government shutdown because of the debt ceiling seems just like "Stop hitting yourself" on the playground. And Germany's budget is far from balanced.

Nominally Germany has a balanced budget. I agree it isn't really balanced and the big zero is just achieved via some shifting around of things.

However the fact that the government jumps through all sorts of hoops to be able to say the budget is balanced is at least an interesting indicator that it does seem to matter to enough people.

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

#68

Post by burkaman » Mon, Oct 24, 2016, 1:28 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?

Yeah I was about to add a note that money is usually more of a motivator than desire for roommates. If you live with Craigslist roommates, it's probably because you couldn't afford not to. But quite a few people live with friends and enjoy it, it's pretty common to not want to live alone.

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

#69

Post by coldtea » Mon, Oct 24, 2016, 1:28 PM UTC

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…

>Your future mobility to pursue jobs in other cities, becoming significantly constrained

Perhaps the idea of people who haven't adopted this is that, unless they like doing so, humans should not have to live like nomads moving here and there to pursue this or that financial opportunity, but instead should be allowed to grow roots in some place, help shape it and improve it, connect with their neighbors, etc.

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

#70

Post by 6DM » Mon, Oct 24, 2016, 1:29 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?

I would argue by financial necessity, but it depends on the region I guess.