# People rent more in Germany



## Hawkdog (Oct 26, 2012)

More renting, but it appears they spend more on housing.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/


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## marina628 (Dec 14, 2010)

My friends moved to Germany two years ago and they rented a house then had to spend $7000 to buy a kitchen for the house.Really weird they take their kitchens with them when they move lol.


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## none (Jan 15, 2013)

They also have much lower unemployment -- are we supposed to infer a causal link?


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## Just a Guy (Mar 27, 2012)

They also have less land per capita and housing is more expensive...I believe the population of Germany is significantly higher than Canada, but the land mass is significantly smaller...your comparing apples to oranges. It's the same as trying to compare Vancouver and Saskatoon.


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## none (Jan 15, 2013)

Land mass comparisons about Canada are debatable. So much of our land is barely habitable.


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## andrewf (Mar 1, 2010)

Theoretically, higher rates of renting can make the labour force more mobile.


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## Rusty O'Toole (Feb 1, 2012)

Have heard that a lot of apartment houses are owned by insurance companies, pension funds and the like. They are interested in a conservative long term investment with steady, reliable cash flow from rents. They seldom buy or sell, and they build or buy when it makes sense from a financial standpoint. This damps down speculation and stabilizes rents.


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## andrewf (Mar 1, 2010)

Landlords are generally price takers. Rental rates are driven by demand.


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## m3s (Apr 3, 2010)

I think it was andrewf who taught me the phrase "You either rent the house, or rent the money" Germany in general is more business minded and less conspicuous I would say.

Way less land mass.. neighbours are definitely closer as is everything, they even stand/sit much closer just by habit. I don't exactly miss mowing a big lawn and all the other chores I had as an owner. My landlord looks after the place very well (doesn't see me as some "scum" renter as someone says on cmf :tongue-new I wasn't really interested to rent in Canada, but here it's normal to rent a nicer place here I guess. As far as the population density, it's very noticeably higher as soon as you cross into Netherlands

My kitchen is nice but it's probably an "owners" kitchen. Counter-top stove, dish washer and fridge built into the counters etc. My neighours seem to move so probably just tend to keep theirs instead of "renting" the appliances as well.


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## Rusty O'Toole (Feb 1, 2012)

Where "everyone" rents it is common to sign long leases. I can see where it would make sense to install your own kitchen, carpet, wallpaper, light fixtures etc. if you planned on staying 10 or 20 years, and had a long lease.

I understand that in England it is common to lease property for 21 years, 99 years or even longer in the case of commercial property. When someone "buys" a property they are likely buying the remainder of a lease.


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## andrewf (Mar 1, 2010)

You can't compare commercial and residential leases. Long commercial leases are pretty standard in NA as well.


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## Rusty O'Toole (Feb 1, 2012)

Why do you keep dragging irrelevant **** into these threads?


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## Addy (Mar 12, 2010)

Play nice now, no need for that. There are ladies in this forum after all. Despite what some say of me.


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## andrewf (Mar 1, 2010)

I dunno, I was responding to your comment. I doubt many people in the UK sign leases for anywhere approaching 20 years for residential property. Owners spend less time on average in a home before moving.


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## Rusty O'Toole (Feb 1, 2012)

If a person wishes to move before the lease is up, they can sell the lease to a new tenant. This is a perfectly normal type of real estate transaction in the UK. Any estate agent does them all the time. It is common to buy the remainder of a lease that has 5, 10 or more years to run.


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## andrewf (Mar 1, 2010)

Here's what I managed to find:

http://www.slowtrav.com/uk/planning/moving.htm



> Leases: Most rentals have yearly leases.


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## Hawkdog (Oct 26, 2012)

m3s said:


> I think it was andrewf who taught me the phrase "You either rent the house, or rent the money"
> 
> or you own the house in which case you are not renting the house or the money.


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## m3s (Apr 3, 2010)

Hawkdog said:


> or you own the house in which case you are not renting the house or the money.


Of course.... but the average Canadian is leveraged to the hilt for 40 years in order to "not end up priced out of the market"

Renting is a form of delaying a major purchase. The house prices in Germany have not bubbled maybe because of this. Buying and selling houses is great for lawyers, banks and RE agents.

I helped building as a teen, and I scoff at the prices of some of them today. The thin vinyl and plywood don't back the price of many of them, and they don't last forever.


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## andrewf (Mar 1, 2010)

Owning a house outright also has an opportunity cost: the return you could have earned had you invested that capital.


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## none (Jan 15, 2013)

^..... plus property taxes and maintenance. But the tax free gains!!!! Whooo!!! or unclaimable loses....


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## Hawkdog (Oct 26, 2012)

none said:


> ^..... plus property taxes and maintenance. But the tax free gains!!!! Whooo!!! or unclaimable loses....


my property taxes are likely equivalent to one of your monthly rent cheques. And my maintenance costs are likely equivalent to one of your rent cheques.
That leaves 10 rent cheques that could stay in my bank account (for one year).


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## Hawkdog (Oct 26, 2012)

andrewf said:


> Owning a house outright also has an opportunity cost: the return you could have earned had you invested that capital.


sure, but there are pitfalls to renting as well. 

My squash buddy and his wife paid their house off in 6 years, now they are investing 60% of their net income. Their house has increased in value around 100 grand. He's 36. 400,000 in investments (not sure what his wife has invested)


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## andrewf (Mar 1, 2010)

Had they rented, they would have substantial investments as well. They also would have invested a substantial portion in the early part of the 2008-present bull market.


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## none (Jan 15, 2013)

Hawkdog said:


> my property taxes are likely equivalent to one of your monthly rent cheques. And my maintenance costs are likely equivalent to one of your rent cheques.
> That leaves 10 rent cheques that could stay in my bank account (for one year).


And the interest on your outstanding mortgage and opportunity cost of equity in the house is currently 14 rent checks.... 

I'm just kidding (well kind of) no point rehashing this 'ol argument again. We'll all find out the answer within the next 5 years I'm sure.


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## Rusty O'Toole (Feb 1, 2012)

"What is a Tenancy? 

A tenancy is an “estate in land” granted for a determined period of time – “term of years” or “fixed-term”.

For example: a tenancy may be 6 months,1 year, 21 years, 99 years etc.

Alternatively a tenancy may be granted for a specific shorter period – a periodic tenancy – yearly, monthly, weekly, even daily).

In return for the “time limited” but exclusive use and possession of the land (and any building/s on that land) the tenant pays his landlord rent.

The landlord may be the freeholder (owner for life – life tenant) or a tenant herself. e.g.:

Freeholder (owner) Landlord grants tenancy to:
- Tenant A (Head lease holder)
- – Tenant A grants a tenancy to “B” (sublease holder)
- – - Tenant B grants a tenancy to “C” etc.

So long as each subsequent sublease is shorter in length than the previous one there is no problem.

A tenancy gives a tenant a “legal interest in the land” and he or she cannot easily be deprived of that interest by the landlord. The landlord would need good reason to terminate the tenancy (breach of contract) and would ordinarily need a court order to do so."

From "LandlordzoneUK"

http://www.landlordzone.co.uk/content/residential-tenancies

You can see that they consider long leases and shorter sub leases to be a normal type of real estate transaction. This does not mean there are no other ways of occupying a house or apartment.


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## Hawkdog (Oct 26, 2012)

andrewf said:


> , they would have substantial investments as well.


 that's not guaranteed.



they caught the booming real estate market here

http://www.vancouversun.com/busines...4+property+assessment+pile/9345777/story.html


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## andrewf (Mar 1, 2010)

If they paid off a house, they should have been able to save the equivalent of the principle in that time. Plus investment returns. There's no guarantees in the stock market, nor are there in real estate, especially in small resource communities.


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## Nemo2 (Mar 1, 2012)

Some people have no 'principles'.


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## Hawkdog (Oct 26, 2012)

andrewf said:


> If they paid off a house, they should have been able to save the equivalent of the principle in that time. Plus investment returns. There's no guarantees in the stock market, nor are there in real estate, especially in small resource communities.


sure, but are they as savvy about investing as you or others on this board? plus they would still be paying rent. Now they have a good 10-15 years to save without having monthly rent payments which potentially doubles the amount of a person can invest each month.


without having to give up privacy to some landlord or have some loony landlord like "None" had.


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## Hawkdog (Oct 26, 2012)

none said:


> And the interest on your outstanding mortgage and opportunity cost of equity in the house is currently 14 rent checks....
> 
> I'm just kidding (well kind of) no point rehashing this 'ol argument again. We'll all find out the answer within the next 5 years I'm sure.


yup in five years when my mortgage is paid off. and you are still paying rent.


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## none (Jan 15, 2013)

I remember quite vividly a line in the wealthy barber that the best investment that most people have made was their house, simply because it's the only investment they've ever had.

Sure, renters sometimes piss their cash away and some house owners only pay interest only. To each his/her own.

Hey, speaking of my landlord, she just sent me another wad of cash to compensate for the eviction notice.... what to do next......


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## Hawkdog (Oct 26, 2012)

save it for next months rent.

It seems every week I read about some scam where someone lost their entire life savings to a crooked investment advisor.




none said:


> I remember quite vividly a line in the wealthy barber that the best investment that most people have made was their house, simply because it's the only investment they've ever had.
> 
> Sure, renters sometimes piss their cash away and some house owners only pay interest only. To each his/her own.
> 
> Hey, speaking of my landlord, she just sent me another wad of cash to compensate for the eviction notice.... what to do next......


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## Addy (Mar 12, 2010)

Hawkdog said:


> save it for next months rent.
> 
> It seems every week I read about some scam where someone lost their entire life savings to a crooked investment advisor.


Hey it doesn't just happen when you use a crooked investment advisor. Most investments have risk, you could potentially lose it all. And that's something you have to consider when investing.


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## andrewf (Mar 1, 2010)

Hawkdog said:


> save it for next months rent.
> 
> It seems every week I read about some scam where someone lost their entire life savings to a crooked investment advisor.


It seems like every week I hear how someone receives millions of dollars, and all just for buying a piece of paper for a couple dollars. No wonder 30% of Canadians are using this as their retirement plan rather than foolishly saving and buying investments that will just be pilfered.


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## m3s (Apr 3, 2010)

Lifestyle choices aside, I wouldn't chose a house purely for an investment today with the government openly and actively trying to make a "soft landing" of the now acknowledged RE bubble. At best they should be almost flat in real terms for awhile, because if they continue higher at historical rates we are in for some kind of "hard landing" eventually. With stocks you can sell and trade them much easier, and there are maybe less amateurs inflating the prices with extreme margin accounts. Houses have major expenses such as roof and renos every other decade. "No no, it's _different_ in Canada" And now we have people retiring with mortgages!


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## andrewf (Mar 1, 2010)

Flat in real terms doesn't help with overvaluation. There need to be real price declines or decades of flat real price appreciation until incomes catch up.


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## hystat (Jun 18, 2010)

most of the Germans I have met in life are miserable people. Any joy is buried deep in their hearts. I have no desire to emulate anything they tend to do in their culture.


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## none (Jan 15, 2013)

hystat said:


> most of the Germans I have met in life are miserable people. Any joy is buried deep in their hearts. I have no desire to emulate anything they tend to do in their culture.


You have a bad sample. I know many Germans and all that I've met are lovely. Maybe like attracts like, who knows? One of my sons best friends is German. She is one of the cutest and sweetest 3 year old I know!

As for the soft landing... that's what I don't get - people make it sounds like a good thing. In my mind a soft landing means that prices slowly decline over a longer period so that the losses associated with a housing corrected are shared by many more people rather than simply the person who bought the over valued house at peak. How is that a good thing?

Anyway, I think people who cheer 'yay, no housing correction! See Garth Turner (who is but a single (yet vocal) voice in the housing market is insane choir)) is STILL wrong!" are missing the point. A correction is inevitable and the longer a correction is delayed the worst it will be. Of course, I could be wrong - I always allow for that.


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## m3s (Apr 3, 2010)

hystat said:


> most of the Germans I have met in life are miserable people. Any joy is buried deep in their hearts. I have no desire to emulate anything they tend to do in their culture.


You've obviously never actually been to Germany, and/or watch too many Hollywood movies :tongue-new: People tend to reflect the way you think of them as well.

In an attempt to quell all the negative stereotypes, Germany is leading ambitious environmental, economic, and social programs at the same time, while still taking long lunch breaks and vacations. Things everyone is convinced do not coexist.


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