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German house prices - how it should be
Topic Started: 30 Sep 2014, 11:17 PM (7,289 Views)
ThePauk
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So the CGT a on all property sold under 10 years, land tax on all property inc the PPOR, transfers tax and high agent coms dis nothing to control house prices in Germany. Oh dear.....
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Veritas
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Never mind the bollix.

This tells you all you need to know.

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Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Sydneyite
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Veritas
2 Oct 2014, 05:12 PM
Never mind the bollix.

This tells you all you need to know.

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No it doesn't - it misses the key period of German re-unification - find a chart that starts in say 1990 and get back to us then.....
Edited by Sydneyite, 2 Oct 2014, 05:59 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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ThePauk
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Or this is more relevant to your question and debunks your unification suggestion.

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Edited by ThePauk, 2 Oct 2014, 05:28 PM.
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Veritas
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Sydneyite
2 Oct 2014, 05:20 PM
No it doesn't - it misses the key period of German unification - find a chart that starts in say 1990 and get back to us then.....
There you go.

I personally accept that different demographics plays a part here but more than this it seems to boil down to the fact that Australia and a few other( mainly English speaking countries) embrace the whole neoliberal experiment with banks and property and Germany did not.

There are key difference in political philosophy, translated into policy, that explain different outcomes in terms of the housing systems.

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Edited by Veritas, 2 Oct 2014, 05:44 PM.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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ThePauk
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Veritas
Correct, German banks will only lend to approx a 70% And getting a mortgage is avery difficult task.
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herbie
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The German housing market had its boom (and bust) in the 90s. (Rather than the noughties like lots of others.) According to "Der Spiegel" anyway:

http://www.spiegel.de/international/business/real-estate-doldrums-why-the-global-housing-market-boom-bypassed-germany-a-552901.html
Edited by herbie, 2 Oct 2014, 05:56 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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ThePauk
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herbie
2 Oct 2014, 05:54 PM
The German housing market had its boom (and bust) in the 90s. (Rather than the noughties like lots of others.) According to "Der Spiegel" anyway:

http://www.spiegel.de/international/business/real-estate-doldrums-why-the-global-housing-market-boom-bypassed-germany-a-552901.html
Herbs
No boom and no bust. Look at the above charts perhaps...

from the article...
"On top of that, according to Power, too few new homes are being built to meet future demand.

"Basically, what that means over time is there's going to be a shortage of housing," Power said. "And if there's a shortage, then rents will have to rise. So, it becomes economical for people to invest in housing and so on and so on and that should mean rising rents and rising prices. But the point is that this is not going to happen tomorrow. It's going to take the next five years, probably, to follow through."

mmmmm...no shortage as they are demolishing buildings as their population declines into the future.
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miw
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ThePauk
2 Oct 2014, 05:10 PM
So the CGT a on all property sold under 10 years, land tax on all property inc the PPOR, transfers tax and high agent coms dis nothing to control house prices in Germany. Oh dear.....
There's no evidence that it does. Why would a very low CGT that almost never gets triggered, taxes that are not much different from a lot of other places and transfer costs that are about the same as everywhere else be any kind of secret sauce?

Especially when the answer is as plain as day in demographics and geography?
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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herbie
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Veritas
2 Oct 2014, 05:43 PM
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I've gotta ask - But does that graph really show 'Affordability' dropping as IRs are also dropping?

Maybe I'm just seeing shit backwards? Maybe German graphs go the opposite way to Aussie ones?? Maybe I shouldn't have had that last glass of scotch??? :)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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