Most Germans don’t buy their homes, they rent
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Re: Most Germans don’t buy their homes, they rent
#2Being 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.
Re: Most Germans don’t buy their homes, they rent
#3Being 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.
Yup.
Germany has one of the lowest adoption rates of credit products such as the humble credit card out of nearly all Western nations.
Debt is not liked.
Edit: From the same site, the linked article at the bottom has the answer: http://qz.com/262595/why-germans-pay-cash-for-almost-everyth...
A better link: http://www.businessinsider.com/you-have-to-understand-german...
Re: Most Germans don’t buy their homes, they rent
#4Article misses the hyperinflation of the 20s and the capital markets in the 50s.
By the time the cold war made it apparent that 20s style economy destroying reparations would not be paid, renting was already baked into the cake.
Residential real estate is non-productive and post WW2 Germany had not use for a capital drain if anything they needed capital along the lines of the Marshall Plan so its not like anyone was interested in wasting capital in a modern USA style housing bubble.
Re: Most Germans don’t buy their homes, they rent
#5So 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 to start new projects, create jobs, etc). Over-borrowing to bid the maximum amount one can to buy a nineteenth century house doesn't create any job for anyone, it just transfers wealth to the hands of the seller.
Re: Most Germans don’t buy their homes, they rent
#6Being 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.
Yup. Germany has one of the lowest adoption rates of credit products such as the humble credit card out of nearly all Western nations. Debt is not liked. Edit: From the same site, the linked article at the bottom has the answer: http://qz.com/262595/why-germans-pay-cash-for-almost-everyth... A better link: http://www.businessinsider.com/you-have-to-understand-german...
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.
Re: Most Germans don’t buy their homes, they rent
#7According to the article, mainly:
1 - Government doesn't subsidize homeowners;
2 - Renting rules are reasonable for renters, increasing supply which makes renting affordable.
There, saved you a click.
Re: Most Germans don’t buy their homes, they rent
#8Being 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.
Agreed. Building a house also locks you money. In Berlin you can spent easily 300k to get a 3 BHK apartment.
Re: Most Germans don’t buy their homes, they rent
#9Being 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.
+1
To explain cultural difference:
- In the US you are considered financially stable if you are always paying your debt/credit on time.
- In the germanic countries you are considered financially stable if you have none.
My US Bank clerk needed a few meetings to convince me that it is good to build go into monthly credits (creditcard) to support my credit score.
Re: Most Germans don’t buy their homes, they rent
#10Being 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.
What about cars? Are Germans more likely to buy or lease a new car? Or do more people buy used cars with cash?