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Realistbear

British H P I Disease To Spread To Germany

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http://business.scotsman.com/finance.cfm?id=366122006

Germany is gateway to property profits

JENNIFER HILL

GERMANY is set to emerge as one of the hottest property markets in Europe, after 15 years of static prices, it was predicted this week.
House prices in cities such as Berlin are poised for a boom, with unemployment falling and property ownership set to rocket, according to property investment specialist Assetz.
Just 13 per cent of the population in Berlin own their own homes, compared with 43 per cent in Germany overall, 66 per cent in the UK and 85 per cent in Spain. However, interest in residential property is on the up, and is starting to ignite prices.
"The UK-led phenomenon of buying your own home has been spreading across Europe and, with the German economy turning around, we forecast that the German population will soon be following in the footsteps of their European counterparts,"
said Stuart Law, managing director of Assetz.
At a cost of about £1,350 per square metre in central Berlin - compared with five times that in Paris, London and other major European capital cities - the investment potential is clear. "With the German economy starting to recover, and the market awakening to the opportunity of property investment,
we can expect to see
significant price rises over the next five to seven years
," said Law
.

This

I wonder if the Germans are getting ready to celebrate HPI and to see their stable property market become a bubble causing untold suffering to millions through debt, lack of affordable housing for the young and vulnerable, reposession orders, higher divorce rates, and "notional wealth" in the form of inflated house prices that benefit no one except the VIs. What has HPI done for Britain? Do the Germans want it?

HPI is nothing more than a disease.

Edited by Realistbear

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http://business.scotsman.com/finance.cfm?id=366122006

I wonder if the Germans are getting ready to celebrate HPI and to see their stable property market become a bubble causing untold suffering to millions through debt, lack of affordable housing for the young and vulnerable, reposession orders, higher divorce rates, and "notional wealth" in the form of inflated house prices that benefit no one except the VIs. What has HPI done for Britain? Do the Germans want it?

HPI is nothing more than a disease.

Someone mentioned on another thread that in Germany you have to have a 40% deposit before buying a house. If this is true, this should be a significant brake on HPI. Though, would this still apply if foreign buyers were buying the houses using loans from foreign banks?

Whether or not this 40% rule applies in Germany, I'd really like to see something like this in the UK. It would prevent credit-fueled housing booms, and also dramatically reduce the number of houses repossessed. There could be a law that loans of no more than 60% of the price of property could be secured on the property, and that no other creditor could try and force the sale of the house of a defaulter. It would still be possible for people to end up owing more than 60% of the value of their house if they bought or MEWed to 60% then the value of the house fell, but at least it would put a significant brake on things.

It would have to be bought in slowly though.

Billy Shears

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I think I read recently that the new German government is expected to follow a much more Blair/Brownish path in many areas, including huge relaxation in the controls over credit. If this is true, then rampant HPI for Germany seems a likelihood - how could anyone turn down the offer of an instant 'miracle economy'?

LL

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how could anyone turn down the offer of an instant 'miracle economy'?

There might be politicians who put the long term interest of their country and people first?

Sorry, I'm being silly.

Billy Shears

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Someone mentioned on another thread that in Germany you have to have a 40% deposit before buying

Billy Shears

Billy, one reason Ive invested in Berlin is I beleive they will liberalise thier mortgage market shortly.

The same occurred in the UK in the 1970s. Traditionally one had to supply a 30%+ deposit, then overnight the market was liberalised and 5% or 0% became available and started HPI in earnest.

Germans are only Human and most Humans want to own the place in which they dwell just as the Lion likes to 'own' his territory marked by scent.

Edited by dogbox

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There might be politicians who put the long term interest of their country and people first?

Sorry, I'm being silly.

Billy Shears

There probably have been some examples - Hugo Chavez in Venezeula immediately comes to mind. He's resisting the takeover by US corporations of his country's utility industries (water, power, etc.) as demanded by the WTO, with the real long-term interests of his people in mind. He has the benefit of having some pretty impressive oil reserves. Not surprisingly, the US is trying to undermine him. I guess the concept of having a genuine, uncorrupted socialist in charge of some oil is pretty scary to them.

OK, I know this is probably a bit of a utopian viewpoint, but I think Chavez is about as close as you could get to the politician BillyShears is asking about. Sad that I can't really think of any others. :(

Cheers

LL

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There probably have been some examples - Hugo Chavez in Venezeula immediately comes to mind. He's resisting the takeover by US corporations of his country's utility industries (water, power, etc.) as demanded by the WTO, with the real long-term interests of his people in mind. He has the benefit of having some pretty impressive oil reserves. Not surprisingly, the US is trying to undermine him. I guess the concept of having a genuine, uncorrupted socialist in charge of some oil is pretty scary to them.

OK, I know this is probably a bit of a utopian viewpoint, but I think Chavez is about as close as you could get to the politician BillyShears is asking about. Sad that I can't really think of any others. :(

Cheers

LL

So the only real politician we have in the world is one that Bush is working to get rid of? Figures!

Billy Shears

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http://business.scotsman.com/finance.cfm?id=366122006

Germany is gateway to property profits

JENNIFER HILL

GERMANY is set to emerge as one of the hottest property markets in Europe, after 15 years of static prices, it was predicted this week.
House prices in cities such as Berlin are poised for a boom, with unemployment falling and property ownership set to rocket, according to property investment specialist Assetz.
I don't think we need to read too much into this - it's based on an Assetz press release. Surprisingly, a company which specialises in over-seas property investment is recommending overseas property investment.
Here's the original release on the Assetz website. Rather similar to the cut'n'paste job in the Scotsman.

http://news.assetz.co.uk/articles/2547.html' rel="external nofollow">
As a magazine editor (and former tabloid hack), I've often complained about the anti-journalist bias on this site. But this sort of pish-poor reporting makes me despair.
:(

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"The UK-led phenomenon of buying your own home has been spreading across Europe and, with the German economy turning around, we forecast that the German population will soon be following in the footsteps of their European counterparts,"

yeah !! think about all the benefits of wasting your savings on the very same property you had before - only for a third of the price. c'mon. lets waste our value and (und) pass on all our capital to some faceless speculators, while leaving our high street like a dry creek.

yeah baby, yeah !!!

raus. raus.!!

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Someone mentioned on another thread that in Germany you have to have a 40% deposit before buying a house. If this is true, this should be a significant brake on HPI. Though, would this still apply if foreign buyers were buying the houses using loans from foreign banks?

It really depends on who the lender is: an ordinary bank, a Sparkasse (savings bank), an insurance company or a Bausparkasse (sort of building society).

On way of building up a deposit is to start a Bauvertrag (a savings contract) with a Bausparkasse at an early age. Sometimes grandparents start them for their grandchildren. Different Bausparkassen have different terms, but a general model is that you agree on a certain sum, say € 50,000 and save up 40 % of this amount at a low rate of interest, the remaining 60 % is then given as a loan, also at a low rate of interest with a fast repayment rate, so that you end up with quite high monthly outgoings. Thus financing a purchase through Bausparvertäge alone would not be "affordable" (taking the UK definition of the term as meaning monthly outgoings - this is referred to, more correctly, in Germany as "monatliche Belastung" (monthly burden) - affordability in its strict sense, of course, means the overall price you pay, i.e. purchase price plus interest over so many years).

If you have your "Bausparvertrag" with say € 10,000 already saved out of your € 50,000 contract, some lenders will regard the entire contract as "equity" and lend you the remainder plus a bridging loan to cover the amount vested in the Bausparvertrag.

My former husband and I bought our first house with two of these contracts (one each) and no further money at all, although our parents helped us with the costs (the notary and the land transfer tax). My husband, being German, had a very old Bausparvertrag. Mine was only 3 years old. (It is usual to save into these contracts for 7 years.).

Some people cash in their Bausparverträge and buy consumer goods. The government used to top up these for contracts low earners although I am not sure whether this is still the case.

Buying houses in Germany is not really fashionable and often considered as "square". There is also a great fear of debt.

A further problem is the dreadful situation on the labour market, which is not really getting much better, plus the fact that more and more people are not working in the regular labour market at all, but in "precarious" job situations.

I wouldn't say that requirements for a deposit are the reason for the market not booming here. It is only really insurance companies that are really strict, but 40 % is rather high, it's more like 20 % (at least according to one agent I was speaking to lately).

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Thanks for the very interesting information Almaen. Hopefully the US, UK, and Australian markets will unwind quickly enough to warn the German people of the dangers of HPI before Germany gets screwed too.

There's a full page article (mostly text) about the Estonian property market today. Talking up buying propety in Estonia big time. But yes, particularly at the end of the article (given advice of people on this forum I looked there particularly carefully), there's the odd piece of pessimism. Estonians are possibly "dismayed" about the sudden leap in house prices, and tend to blame the British for HPI. And at the very end an "ex-pat" says that it's a speculative bubble, with a comment of "This is Estonia!" or similar.

Billy Shears

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There probably have been some examples - Hugo Chavez in Venezeula immediately comes to mind. He's resisting the takeover by US corporations of his country's utility industries (water, power, etc.) as demanded by the WTO, with the real long-term interests of his people in mind. He has the benefit of having some pretty impressive oil reserves. Not surprisingly, the US is trying to undermine him. I guess the concept of having a genuine, uncorrupted socialist in charge of some oil is pretty scary to them.

OK, I know this is probably a bit of a utopian viewpoint, but I think Chavez is about as close as you could get to the politician BillyShears is asking about. Sad that I can't really think of any others. :(

Cheers

LL

Yes, Chávez is a sweetheart...

http://web.amnesty.org/report2005/ven-summary-eng

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Buying houses in Germany is not really fashionable and often considered as "square".

I agree with this comment entirely based on my time in Germany working for many years for a German multinational. Owning a house carries no particular prestige amongst Germans and most are happy to rent which is regarded as perfectly normal. Rental yields, by the way, are low.

Germans lack the peculiar obsession we have in the UK for home ownership 'at any price'. They are also a risk-averse nation and dislike debt. I would be very surprised to see a house price boom there on the scale of the UK bubble. My German friends laugh at UK house prices which they find unbelievable.

Edited by Red Baron

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I agree with this comment entirely based on my time in Germany working for many years for a German multinational. Owning a house carries no particular prestige amongst Germans and most are happy to rent which is regarded as perfectly normal. Rental yields, by the way, are low.

Germans lack the peculiar obsession we have in the UK for home ownership 'at any price'. They are also a risk-averse nation and dislike debt. I would be very surprised to see a house price boom there on the scale of the UK bubble. My German friends laugh at UK house prices which they find unbelievable.

If rental yields are already low, surely that should stop the BTLers coming in and pushing up the price up so that the yields go from small to ridiculously small?

Oh wait a second, that only stops sensible BTLers.

Billy Shears

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I don't think we need to read too much into this - it's based on an Assetz press release. Surprisingly, a company which specialises in over-seas property investment is recommending overseas property investment.

Here's the original release on the Assetz website. Rather similar to the cut'n'paste job in the Scotsman.

http://news.assetz.co.uk/articles/2547.html

As a magazine editor (and former tabloid hack), I've often complained about the anti-journalist bias on this site. But this sort of pish-poor reporting makes me despair. :(

"I don't think we need to read too much into this "

Well, the serious financial press seem to be pretty certain that ' liberalisation' of the German mortgage market is to happen and probably with the same results as elsewhere!

"One of the reasons that private equity firms expect a higher valuation of German property is the impending liberalisation of the German mortgage market. German property buyers currently have to deal with a hugely restrictive lending system. Once mortgages become easier to get, additional liquidity will rush into the market and lift property prices."

http://www.moneyweek.com/file/3082/german-property.html

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House prices in cities such as Berlin are poised for a boom, with unemployment falling and property ownership set to rocket, according to property investment specialist Assetz.

Seems to me they realised that it's about to pop big time in the UK and they're looking to ramp up the next market. What is a property investment "specialist" going to say exactly? "It's all over chaps, invest your money in stocks instead as property is for morons....

No doubt looking for a fresh bunch of suckers to rush blindly in with their large wads of mewed cash...

:lol:

Billy, one reason Ive invested in Berlin....<blah blah blah blah>

Germans are only Human and most Humans want to own the place in which they dwell just as the Lion likes to 'own' his territory marked by scent.

Speaking of suckers :lol:

OK - so DogBox has to piss in all four corners to "mark his territory..." :o

Germans are indeed human. I have a few German friends and they are very much against piling into debt. They openly laugh at the way us Anglo Saxons (as they French say...) have this childish obsession with property and fear of "missing the boat". In Germany, due to proper tenancy laws, it is possible to rent much better than it is in the UK, and the dear landlords provide a true service unlike our johnny come lately "money for nothing but please don't ask me about the size of my mortgage" BTL'ers.

If overseas people pile into the German market and start up a storm of rampant HPI, I think Auntie Angela will have something to say about it....

;)

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German property buyers currently have to deal with a hugely restrictive lending system. Once mortgages become easier to get, additional liquidity will rush into the market and lift property prices."

Sorry, this is rubbish.

Lending in Germany is not 'hugely restrictive'; the lenders simply apply sensible criteria as did UK lenders once upon a time. Furthermore there will have to be a massive cultural change to convince Germans to embrace the huge levels of debt that we are happy to accept in the UK.

No, the only providers for this 'additional liquidity' will be the same British mugs that are propping up the UK bubble. They need to do much more research into the German physche!

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On a related note, I’ve been studying the television here in Germany and have found an alarming shortage of Property shows!

Another weird observation is the unusual number of ‘how it’s made’ type shows. Normally they show all the production stages at a German factory (machines used and the machinist who operates them) with a voice over explaining each part or the process.

I’ve seen examples for hammers, cakes, golf toys, cars, etc all ‘Made in Germany’ of course. I don’t remember seeing anything like this in the UK.

Perhaps this is a part of an engineering/export led mentality and/or something they’re trying to promote?

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Another weird observation is the unusual number of ‘how it’s made’ type shows. Normally they show all the production stages at a German factory (machines used and the machinist who operates them) with a voice over explaining each part or the process.

I’ve seen examples for hammers, cakes, golf toys, cars, etc all ‘Made in Germany’ of course. I don’t remember seeing anything like this in the UK.

On the cooking/cakes side of things, try "Big Cook Little Cook".

Billy Shears

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Seems to me they realised that it's about to pop big time in the UK and they're looking to ramp up the next market. What is a property investment "specialist" going to say exactly? "It's all over chaps, invest your money in stocks instead as property is for morons....

No doubt looking for a fresh bunch of suckers to rush blindly in with their large wads of mewed cash...

:lol:

Speaking of suckers :lol:

OK - so DogBox has to piss in all four corners to "mark his territory..." :o

Germans are indeed human. I have a few German friends and they are very much against piling into debt. They openly laugh at the way us Anglo Saxons (as they French say...) have this childish obsession with property and fear of "missing the boat". In Germany, due to proper tenancy laws, it is possible to rent much better than it is in the UK, and the dear landlords provide a true service unlike our johnny come lately "money for nothing but please don't ask me about the size of my mortgage" BTL'ers.

If overseas people pile into the German market and start up a storm of rampant HPI, I think Auntie Angela will have something to say about it....

;)

Germans have a sense of place in society. They do not think of life as a race to acquire more and thus stress and strain to break out of their social class. There is no need. Life has enough for everyone at each social level. The british however, are caught up in some illusory race to escape from their class which rarely works. There is no need to re-create oneself...you cant. Buying a property does not buy a new soul. The whole thing however has totally gotten out of control so it must complete its course.

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Another weird observation is the unusual number of ‘how it’s made’ type shows. Normally they show all the production stages at a German factory (machines used and the machinist who operates them) with a voice over explaining each part or the process.

I’ve seen examples for hammers, cakes, golf toys, cars, etc all ‘Made in Germany’ of course. I don’t remember seeing anything like this in the UK.

I remember seeing something just like this on the BBC. Mind you, it was in black-and-white :D

In the early 70s(?) they had a programme called "Made in Britain: Focus on Exports".

Lots of shots of production lines, high-speed machines etc.

Aah.. industry. Remember that?

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  • 301 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%



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