> Most people in Germany can't afford to buy an apartment
Most people in Germany don’t buy the apartments they live in, because renting in Germany gives you more or less the same rights as owning a leasehold flat in the UK. If you really want to buy a flat, tax-wise it is more convenient to rent it out and rent another one to live in.
In many cities there are rent control mechanisms that make renting extremely cheaper than buying.
>I remember reading that Germans in general are more likely to to rent than own their housing. Is that not true?
The majority rent not because of a lifestyle choice but because they can't afford to buy anything so renting is their only choice. What else are they gonna do, be homeless? All mid-upper class German families I met owned their properties.
>I assume Germany/Europe is having or will have the same housing rental/ownership price explosion as USA?
Ha, joke's on you. Home ownership in Germany (and most of the developed EU) is far more expensive than in the US when you factor median wages to median real estate prices ratio.
Americans complain a lot but real estate there is far more in reach for the average skilled worker than it is in Germany for example. The price per square foot/meter in Munich or Paris is nearly the same as in the Bay Area yet wages here are half to a quarter of that of the US workers. It's insane.
Rentals in Germany are more affordable, but that's only if you get a place in the 80 person queue who signed up for the apartment viewing within the first hour since the listing went up online. Apartment hunting in places with rent control like Germany or Sweden is a meme on its own.
> have you checked house prices near big German cities like Munich?
People generally don’t buy but rent and the rental market is set in such a way as not to gouge people. Still expensive but salaries are relatively high and in all other respects costs of living is very reasonable
> Someone with a regular job can not afford a house close to a major city any more
Germany allows foreigners to purchase property, and as such prices in very desirable locations (Munich, Dusseldorf) have gone up. But not everywhere. Furthermore, it is really not necessary to own a house, as the rental market is well developed - many people choose to rent. Lastly, looking at The Economist data, affordability in Germany is better than, say, UK, Canada, and the US. [1]
> People dress cheaply, buy used cars and many live in frugal appartments
Yes, it is considered impolite to show off, and people don't really care about appearances, so they can be shabbily dressed. But then, they don't have to worry about healthcare, they travel quite a bit, and have time to read or follow their passions.
> buy in stores that many American or Canadians would consider third world
Aldi sells good food at excellent prices, by foregoing the eye candy and marketing found elsewhere.
> On the other hand, many Germans believe: renting is paying someone else, buying is paying yourself (which is nonsense). Especially in more rural areas, buying/building a house is considered a big achievement in life. People are even willing to move from a smaller city to little towns just to be home-owners.
People change to small towns because they want stress free life and a better/larger home for the same price of a small apartment in big cities.
Living in cities brings also disadvantages!
> Whereas in Germany it's my understanding that renters essentially can never be kicked out unless they do something egregious
That's a double edge sword. Would you rent your place to people knowing they can stop paying and trash your place and you can't get rid of them? I'm not a landlord but this scenario would scare the hell out of me, which is probably why German landlords ask for so may documents(bordering on privacy violation), and are so picky when choosing tenants that apartment hunting is basically a part time job in Germany.
>it's usual for people to choose to rent for life
Most people don't choose the rental life, but they don't have a choice, since property prices in German cities are far out of reach of the middle class who doesn't have inherited wealth or financial assistances from parents.
Renting is fine when you're young and employed, but owning your place of living outright by the time of your retirement, is still better for you financially, than having to pay rent as a retiree, as most likely rental costs will go up faster than inflation and wage growth as per current trajectory, and your pension will be too small to pay for living costs and rent on top of that meaning you'll struggle with poverty like some retirees in Germany today, but on a larger scale. Whereas if you pay off your mortgage until then, your retirement will be much less stressful.
Oh, and it will get even worse from here as Germany is refusing to build, to reduce CO2 emissions apparently, and increase migration will put additional pressure over existing housing stock. Great for throe who already own, not for those new to the market.
> It is interesting fact that more developed European countries, such as Switzerland (42%) or Germany (51%), tended to have a lower home ownership rate compared to less developed countries such as Lithuania (90%) or Romania (96%).
Another factor is tenant rights -- renters in places like Germany have so many rights and protections that renting is a lot more like owning than it would be elsewhere.
That's quite insulting. The trend for Germans to rent and not buy is a choice, not due to being too poor to afford a house.
They don't share the homeownership fever prevalent in the UK and USA. Germans (and the French) rent due to cultural reasons, it's not looked down upon at all, it's a pragmatic alternative and puts the renter on a much more equal footing with the landlord than in other countries (like the UK).
Of course this is all quite obvious by glancing at the rental prices in nice neighbourhoods in Frankfurt, Berlin, Munich, Paris...
> Progressive taxes on investors can mitigate this and make home ownership more affordable
In Germany home ownership is not seen as strictly positive in the same way it is in the US for example. Many, perhaps even the majority, of Germans go their whole lives as renters.
> And it's not just Munich. Every city in Germany has this problem.
No, Munich is an outlier. You generally can find apartments under 10€/m² without too much trouble, at least in mid-sized cities. However, it’s true that rents have been rising significantly over the past decade or so.
> In general the German population doesn’t care about owning property (last I saw only 40% of the country had actual interest in home ownership) and so this puts the market in the hands of the landlords entirely.
In general, at least around big cities(100 km radius from München, for example), the "german" population does not afford a house. A new house is around 450000 euros and the land under it is also between 200 - 500 Euros per square meter. For a lot of people, especially migrants, this is undoable. If course if you go in forgotten places with no industry, no public transport and a lot of neo nazis you can find affordable housing.
> It's hard to be sure I'm staying with a local making some cash off their spare room, rather than someone "farming" a bunch of cheap properties.
The big problem in a lot of places is that these properties are far from cheap.
I live in Stuttgart, one of the most expensive real estate markets in Germany (and maybe Europe?). House/apartment prices continue to climb past the level of absurdity for most residents, and when new "cheap" properties, for the low price of 250-350,000 Eur, hit the market, they're often recently snapped up by wealthy property speculators in the city who turn them around and run them as Airbnb properties at 150-300 Eur/night. It prices folks with middle class incomes right out of the city.
It's to the point that the state is planning laws that would prohibit short-term leasing schemes for whole flats if the flat isn't zoned as commercial property. People will still be able to rent out a room in their flat, but it will have to be a place where they live.
Most people in Germany don’t buy the apartments they live in, because renting in Germany gives you more or less the same rights as owning a leasehold flat in the UK. If you really want to buy a flat, tax-wise it is more convenient to rent it out and rent another one to live in.
In many cities there are rent control mechanisms that make renting extremely cheaper than buying.
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