"International visitors are often stunned by German property prices. Every house and apartment looks like a bargain when compared with similar properties in Australia, Britain or New Zealand.
What you typically pay for a small flat in Ballarat or Wollongong would buy you a decent-sized family home in Cologne or Hanover. And for the price of a detached house in one of Australia's capital cities, in Germany you would get a property so big you'd probably keep some of the savings and fill your new double garage with a BMW and a Porsche."
MIW "The key to the story is that German municipal authorities consistently increase housing supply by releasing land for development on a regular basis. The ultimate driver is a central government policy of providing financial support to municipalities based on an up-to-date and accurate count of the number of residents in each area.
In fact they don't release land on a regular basis. In an ideal world they would, but in practice the release is always far below the demand. I've actually lived in a small German city and the constant complaint I heard was that there was absolutely no building land available. And the land that was going to be released had a 10-year waiting list. In order to release land they needed to resume it from a farmer, so there was a strong farm and environmental lobby stopping the release of land.
As a result you couldn't buy and you couldn't build, so you were stuck with renting whether you liked it or not.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
In fact they don't release land on a regular basis. In an ideal world they would, but in practice the release is always far below the demand. I've actually lived in a small German city and the constant complaint I heard was that there was absolutely no building land available. And the land that was going to be released had a 10-year waiting list. In order to release land they needed to resume it from a farmer, so there was a strong farm and environmental lobby stopping the release of land.
As a result you couldn't buy and you couldn't build, so you were stuck with renting whether you liked it or not.
While I appreciate your anecdotal evidence, it does not seem to match the articles and data I can see..
"What is different about Germany, though, is the supply of housing. Put simply, the Germans have continuously built more houses and flats than other countries. They have also zoned more land for development, even though Germany is one of the most densely populated countries in Europe.
The constant supply of land for development has ensured a steady supply of housing. This, in turn, has not only kept house prices low, it has also prevented any kind of property speculation."
Now that you you have done a search for fixer-uppers with no land in bumfuck where there are no jobs (did you notice that most of the ads suggested they were only suitable as weekend getaways?), let's get real. Here is a nice 3-bedroom house on about 1/4 acre, but still 110km from the nearest airport.
Now that you you have done a search for fixer-uppers with no land in bumfuck where there are no jobs (did you notice that most of the ads suggested they were only suitable as weekend getaways?), let's get real. Here is a nice 3-bedroom house on about 1/4 acre, but still 110km from the nearest airport.
http://www.thelocal.de/20140605/third-of-renters-in-germany-can-afford-own-home " study by Sparda-Bank showed that a monthly net income of €1,500 would be enough to buy a property, although this does vary from region to region. Bremen is one of the cheapest areas in Germany to buy a house. You need 4.3 times the annual net income there, while Munich is the most expensive. Buyers would need their entire net income for almost ten years to buy a house outright. The average home in Germany costs €223,000. "
What is that, $430k for an average house? Well stuff me....
http://www.thelocal.de/20140605/third-of-renters-in-germany-can-afford-own-home " study by Sparda-Bank showed that a monthly net income of €1,500 would be enough to buy a property, although this does vary from region to region. Bremen is one of the cheapest areas in Germany to buy a house. You need 4.3 times the annual net income there, while Munich is the most expensive. Buyers would need their entire net income for almost ten years to buy a house outright. The average home in Germany costs €223,000. "
What is that, $430k for an average house? Well stuff me....
Well this is about the same in Brisbane although I haven't looked past the 1st page. I've chosen a unit very close to the CBD. Prices fall as I venture further out.
The median price of a Brisbane house is $442,870 according to the tables below.
So Brisbane is comparable to Germany where it's apparently perfect.
I don't believe that anyone suggested that house and apartment prices in Sydney were not higher than Berlin, but considering the punitive laws that heavily favour tenants and in particular the completely different demand equation it's really a wonder why prices in Germany are not lower. If they were under the same buyer demand pressure they would be far higher than they are.
I think that where you came undone Paul was that you converted €299,500 to $350,000 AUD but in fact it's about $434,057 converted at $0.69 AUD to the Euro. Then when we add on one car space at €27,000 it all comes to $473,188 AUD which is comparable to new off the plan 2 bed units in most Australian cities.
It looks to me as though Brisbane and probably Melbourne represent better value that the example you chose for Berlin, but Berlin represents slightly better value than the Booming Sydney. A little more easing in the AUD and a little more boom in Berlin and that balance will change. You may not be aware of this but real estate is booming in parts of Germany and rents are sky rocketing to the point where the government has stepped in with even more draconian rent laws.
In order to keep city rents broadly affordable, landlords will be barred from raising them by more than 10 percent above the local average for new tenants.
The law aims to alleviate exorbitant rental increases in Berlin, Munich, Hamburg and other popular cities which are pricing especially students and young families out of the market.
"The 'rental price brake' will help keep rents affordable for average wage earners," said Justice and Consumer Protection Minister Heiko Maas, adding that commonly seen rental hikes of 30 to 40 percent were "inacceptable".
Under the new law, which is set to stay in effect until 2020, property owners must also pay for estate agent fees, a charge so far normally levelled on tenants.
Newly constructed or extensively renovated buildings will be exempt from the 10 percent-cap, so as not to discourage new property construction in cities with apartment shortages.
The opposition ecologist Greens party and the far-left Linke party have criticised those exemptions, saying they would negate the intended effect of bringing down rents as expensive new luxury apartment blocks drive up average rents.
The rental cap was first proposed in last year's election campaign by the centre-left Social Democrats, who are now the junior partners in conservative Chancellor Angela Merkel's 'grand coalition' government.
The law will apply only in "highly strained rental property markets", which are to be determined by Germany's 16 states.
The states will calculate how much local rents are above the national average and factor in occupancy rates and whether areas are experiencing a large influx of residents.
The German Tenants' Association praised the reforms as "an important s tep to limit drastic rental increases especially in large cities, densely populated areas and university towns".
But its director Lukas Siebenkotten also called for improvements to the bill, which must be passed by both houses of parliament, especially to clarify how breaches should be punished.
It appears to me that your German model may not be quite as wonderful as you think.
In fact if Pauls example is about normal in Berlin with a total cost of 326,500 Euros for a smallish 2 bed 1 bath 1 car OTP apartment, then when I compare that with the median income of 36,000 euros for a single person, then using the BS measure that everyone else uses that's a multiple of 9.07 times income.
Paul I can see why they choose to rent. Apart from the difficulty saving a 30% deposit and getting a loan, the cost of new housing is unaffordable for most people. Even in a household with 2 full median incomes it's still 4.5 times gross household income. If we used 'disposable' income it would be far higher. If we used two median Sydney incomes the ratio would be far better in Sydney because our wages are higher. I'll let someone else do that calculation.
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