The German Property Market

[Iormlund]

I think it's cultural.

I'd like to point out that high tenant protection does not necessarily lead to a dynamic renting market. In fact, in Spain the opposite happens. Since eviction can be so difficult and costly, owners will often keep the property vacant, treating it as an investment. This severely constrains offer and drives rents higher which in turn makes ownership more attractive.

[Zanza]

because the costs of letting agents are borne by the landlord

No, they are borne by the tenant. The new government wants to change that though.

but cannot be more than 20 per cent higher than similar properties in the area

Huh? Never heard about that. I very much doubt it is true. This is still a free country and you can take whatever rent you want.

[Syt]

because the costs of letting agents are borne by the landlord

No, they are borne by the tenant. The new government wants to change that though.

Same in Austria (except no push by government to change that). But hey, instead of three months' rent in commissions they can now only charge two months if the lease is limited to 4 years or less (which is probably the majority of lease contracts).

Therefore most people try to avoid agents when looking for rentals, unless they need something fast.

[CountDeMoney]

I'm curious what people here think. I mean, I know that Ide will love it because it's government regulation and it keeps housing cheap; but what about the rest of you?

I'mma fer it.  Ain't nothing free about the free market.

The one aspect of the real estate market in America that is consistently used is the ability to use the wide and diverse range of property costs as barriers in society.  The drastic differences in unfettered price points allows "you" to get away from "them", and it affects everything from school systems to shopping.   And Americans like it that way.

[The Brain]

Living among poor people would suck ass.

[MadImmortalMan]

Do they ever intervene the other way? Say the next fifty years sees a mass departure from the use of commercial office space, and urban centers shift to converting that space into residential. Wouldn't that crater the prices in areas typically controlled this way, and might they need to start bumping up selling prices as intervention?

[alfred russel]

I'm curious what people here think. I mean, I know that Ide will love it because it's government regulation and it keeps housing cheap; but what about the rest of you?

Berlin is a really poor city to use as a comparison--yes it is a capital city, but it is in the middle of economically depressed east germany. Frankfurt or Munich might be more interesting.

In general, Germany has better infrastructure than the US, a better education system than the US, and a much higher population density than the US (higher population density is correlated with higher productivity). However, the per capita income is still less than in the US (say roughly in the 15% - 25% range, depending how you want to measure). Overall costs are higher in Germany despite the article saying there are low rents.

I think there are trade offs between the europe way vs. the US/anglo way. In this case, I'm skeptical the about the data selection. I suspect rents are generally a good bit lower in the US than Germany, if only because we have lower population density. New York and San Francisco really shouldn't be compared to Berlin because the land is so much more constrained in the US locations and the places are much more economically robust.

FWIW, if you were to compare metro Atlanta to the Berlin prices in the article, Atlanta is cheaper. I realize Atlanta is not exactly our leading city, but it probably has more people than Berlin (if more sprawl).