Jump to content
House Price Crash Forum
Olebrum

How Germany Achieved Stable And Affordable Housing

Recommended Posts

An interesting article over at Naked Capitalism.

It does seem that the Germans have got many things figured out.

We would do well if we tried to emulate them in a few areas :

- Secure tenancy is good for both professional landlords and tenants

- Allow enough development to meet the demand for new houses, factories,commercial buildings etc

- Rigour is preferred to intuition

- Only try to compete where there is a reasonable chance of winning

- The relationships within and across groups like labour, capital, government and unions seems to be consensual rather than adversarial

Share this post


Link to post
Share on other sites

Considering the fact that half of us supposedly have German blood you'd have thought

emulating their housing market would be easy.

We are still suffering from the delusion that we can become rich by selling each other property

that increases in price exponentially.

Share this post


Link to post
Share on other sites

The UK is a strange society, where insecurity and delusion runs rampant imo.

What 99% of the population need to be told is "you're a poor wage slave and you always will be, if you keep consuming useless sh1te and thinking that house prices only ever go up."

Lets see how they like that one. :lol:

Share this post


Link to post
Share on other sites

"They mailed their inflation south to the PIIGS via the euro"

This.

With such low ownership levels and if they are 'forced' to recycle their savings into the German economy rather than export that inflation into the piggies at some point they'll probably end up with a housing boom/bubble anyway. What else will they do with it all?

Share this post


Link to post
Share on other sites

They're all gonna but themselves a nice place from those nice people in the sun.

Makes more sense than handing it over to that nice friendly bank manager who lent it to the people in the sun that won't pay it back

Share this post


Link to post
Share on other sites

Good find.

The German rental system is another key factor contributing to the stability and affordability of the housing market. While the majority of rental dwellings in Germany are private, rents are regulated and prices are prevented from increasing sharply. Tenants also have security of tenure as long as they pay the rent and behave well, except on the rare occassion when a member of the landlord’s family needs the accomodation or when the building is going to be replaced.

I'm not into European law or human rights, so this is a long shot, but might it be possible to propose that having "virtually no security of tenure" in your main home is a breach of your human rights? Even if it doesn't break any laws its disgraceful that one person should have so much power over another person or family just because they chose(or are forced) to rent their home.

Further, because renting is the dominant housing choice in Germany, the political system is highly sensitive to tenants’ rights and perecived threats to the status quo typically receives prominant media attention and political responses.

I would love this to be the case here, but sadly I don't think it will ever happen.

Since home prices are relatively stable (owing to liberal supply) and renters enjoy secure tenure, Germans have little incentive to rush into owner occupation. As such, Germany doesn’t suffer from the ‘panic buying’ and speculation often present in bubble housing markets.

That's just put the last nail in the coffin. If there is no way to "make" money speculating in bubble markets the UK won't be interested.

In comparison, the UK rental system could not be more different. According to the RICS European Housing Review: The UK now has probably the most liberalised housing sector in Europe since the 1989 abolition for new tenancies of previous controls. There is only limited security of tenure for the first six months of a tenancy in the most common types of rental contract and rents are freely negotiable… The typical rental property is a terraced house in an outer or inner suburb of a town or city. The property will rarely be new: only 13% are post-1985, and almost two-thirds are pre-1945, although most will have been recently modernised.

And because of the volatile nature of UK home prices (caused largely by supply constraints) and the lack of security of tenure in the rental market, ’panic buying’ from first-time buyers and investor speculation is prevelent when house prices are rising, adding to price volatility:

Translated:

Keep the surfs in line with high rents and no security, then spend all the rent you collect on more overpriced housing stock to keep the whole ponzi scheme going.

I know(hope) it had to come crashing down one day, but for the sake of my children and their children (if they can afford to have any) I hope we see a move towards a better regulated rental market, and hence a less volatile housing market.

Share this post


Link to post
Share on other sites

My experience with the German rental market is that the rent controls and inflexible leases mean that landlords are very careful who they rent properties out to as they may be stuck with them for some time. This makes the rental market much less fluid than in the UK. Ok if you are in a rental property and have a stable job. Rents are cheaper than the UK like for like and properties far better built however the average Brit tenant wouldn't have the discipline for German communal living.... ie not having bbqs on the terrace, getting drunk, making a lot of noise and generally trashing the property.

The housing market looks cheap now relative to the UK but go back a couple of decades and property was ueberexpensive and probably remains unfordable in places like Munich.

Share this post


Link to post
Share on other sites

Good find.

I'm not into European law or human rights, so this is a long shot, but might it be possible to propose that having "virtually no security of tenure" in your main home is a breach of your human rights? Even if it doesn't break any laws its disgraceful that one person should have so much power over another person or family just because they chose(or are forced) to rent their home.

Yep - Thatcher and her Con hatchet men reduced the population to a modern serfdom with the 80's Housing Acts which is why tens of thousands marched & fought to stand against her manias.

Cameron continues the pisstake today by slashing the last rights left for a prole to a proper house/rental tenure

Share this post


Link to post
Share on other sites

Yep - Thatcher and her Con hatchet men reduced the population to a modern serfdom with the 80's Housing Acts which is why tens of thousands marched & fought to stand against her manias.

Cameron continues the pisstake today by slashing the last rights left for a prole to a proper house/rental tenure

...so what did Labour do about it '97-2010....?... :rolleyes:

Share this post


Link to post
Share on other sites

...so what did Labour do about it '97-2010....?... :rolleyes:

Nothing.

Tories will steal and say you deserve it, labour will steal and say it's for fairness.

Both are thieves.

Share this post


Link to post
Share on other sites

An interesting article over at Naked Capitalism.

Excellent find Olebrum. Thanks!

Best summary:

In my findings presented below, I have compared and contrasted the German housing system with that of the United Kingdom (UK), which is considered amongst the most unaffordable and supply-constrained markets in the world.

You will see that German and UK housing policies are polar opposites, with the former providing highly responsive housing supply, significant rental controls, and tighter credit regulations compared with the latter.

We do the exact opposite (See my little "slogan", under my avatar photo, top-left.)

And the consequences of these two opposite polices are :

Screen-shot-2011-06-23-at-3.16.47-AM.png

Share this post


Link to post
Share on other sites

Excellent find Olebrum. Thanks!

You are right you know, housing bubbles in the eurozone and the UK are caused solely by fiat money and FRB banking.

What's more, you are right that germany no longer exists as a discrete economic entity as it is now just one sector of the euro project in the same way that newcastle is just part of the UK fiat system.

:)

Share this post


Link to post
Share on other sites

Our problem is that we live on a small island. What we need is lebensraum. :P

Still, if a new ice age is coming sea levels will fall and we can re-colonise Doggerland

Germany and Britain have very similar population densities.

See here: http://en.wikipedia.org/wiki/List_of_sovereign_states_and_dependent_territories_by_population_density

Share this post


Link to post
Share on other sites

Eurozones, ToW. Eurozone.

Germany is no longer.

Both mortgage regulations and planning systems are still national.

That explains why Ireland and Spain had bubbles, but Germany didn't.

Share this post


Link to post
Share on other sites

Both mortgage regulations and planning systems are still national.

That explains why Ireland and Spain had bubbles, but Germany didn't.

The eurozone had a bubble, the different regulation and planning systems changed where inside the eurozone - if the planning and regulation systems were equal accross the eurozone, the bubble would be everywhere.

The bubble was caused by fiat money and FRB banking.

Share this post


Link to post
Share on other sites

The eurozone had a bubble, the different regulation and planning systems changed where inside the eurozone - if the planning and regulation systems were equal accross the eurozone, the bubble would be everywhere.

The bubble was caused by fiat money and FRB banking.

If the whole Eurozone had a German-like liberal planning policy and tight mortgage regulation, do you think they would have had a bubble?

Share this post


Link to post
Share on other sites

We are still suffering from the delusion that we can become rich by selling each other property

that increases in price exponentially.

It's no delusion. Some do get insanely rich thanks to inflation and they're running the show. Wealth redistribution, from the bottom to the top, by design.

Share this post


Link to post
Share on other sites

If the whole Eurozone had a German-like liberal planning policy and tight mortgage regulation, do you think they would have had a bubble?

Yes, obviously - as bubbles are caused by fiat money and FRB banking.

All the german part of the eurozone managed to do is push the bubble south.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.