The Off Topic Topic

[Zanza]

That's U-Bahn and S-Bahn.

Rent control was only introduced in Germany in 2015, so the effect can't be visible yet.

[The Brain]

Rent control was only introduced in Germany in 2015, so the effect can't be visible yet.

Why do Germans want a dysfunctional housing sector?

[Iormlund]

My guess is that the low prices are due to the area being relatively poor. I do know there are few industry jobs there. It was rare to see an opening in the area, whereas one can find all sort of offers all over West Germany, and especially in the South-Southwest. I would've willingly taken a hit on my salary to live there, and surely the same goes for most qualified Germans.

However there are plenty of new, well paying IT jobs. These workers with high salaries could displace older residents, which helps explain the recent change to rent control.

[Zanza]

Rent control was only introduced in Germany in 2015, so the effect can't be visible yet.

Why do Germans want a dysfunctional housing sector?

I doubt that the new rent control measure will do anything, especially in the hot spots like Munich, Hamburg or Frankfurt. It limits rent increase to 10% over the average rent in the area when the renter changes. But you'll likely always find someone who is willing to pay a rent increase of more than that in the most attractive areas. So the law will just be ignored as there is no real way to enforce it.

There has always been a rule that you can't increase rent by more than 20% in 3 years. That hasn't distorted the real estate market so far.

What is much more damaging to the real estate market is the extremely low interest rates we've had for several years now. Not for renters, but for buyers.

[The Brain]

Rent control was only introduced in Germany in 2015, so the effect can't be visible yet.

Why do Germans want a dysfunctional housing sector?

I doubt that the new rent control measure will do anything, especially in the hot spots like Munich, Hamburg or Frankfurt. It limits rent increase to 10% over the average rent in the area when the renter changes. But you'll likely always find someone who is willing to pay a rent increase of more than that in the most attractive areas. So the law will just be ignored as there is no real way to enforce it.

There has always been a rule that you can't increase rent by more than 20% in 3 years. That hasn't distorted the real estate market so far.

What is much more damaging to the real estate market is the extremely low interest rates we've had for several years now. Not for renters, but for buyers.

Sounds promising, let's hope it has no effect.

[Zanza]

My guess is that the low prices are due to the area being relatively poor. I do know there are few industry jobs there. It was rare to see an opening in the area, whereas one can find all sort of offers all over West Germany, and especially in the South-Southwest. I would've willingly taken a hit on my salary to live there, and surely the same goes for most qualified Germans.

While there is a sizeable contigent of "Swabians" in Berlin to the extent that it has become a swearword, the population of Berlin has only grown by 30.000 people since reunification, so there can't be a massive migration to Berlin. I know quite a few people that moved there, but also quite a few people that left.

However there are plenty of new, well paying IT jobs. These workers with high salaries could displace older residents, which helps explain the recent change to rent control.

Aha... when I looked for jobs in Berlin the last time, they were still paid poorly compared to the South of Germany. They have fancy startup jobs there where you can work on cutting edge ideas and technology. So that might be a draw. This article also suggests that the salaries for IT experts in Berlin are less than average:
http://t3n.de/news/it-gehaelter-2015-entwickler-597308/

[Josquius]

Saw a similar map for London last week though it fell flat in that it was just comparing homes....so mostly flats at some stations and houses at others

[garbon]

Well here is one from last fall for London. One bedroom rents.

[Admiral Yi]

Fucking Thatcher. 

[Liep]

Wondered why Hatton Cross was so cheap, googled and found out it's basically inside Heathrow Airport. :p

[DGuller]

There has always been a rule that you can't increase rent by more than 20% in 3 years. That hasn't distorted the real estate market so far.

That's a pretty lenient rent control, so it shouldn't distort things.  It should stabilize more than distort.  In US, it's far more draconian where it exists, ironically enough.  Sometimes rate of inflation is the best landlords can hope for.

[jimmy olsen]

A friend of mine posted on Facebook a meme that is quite telling for the average joe's view in Germany:

(From a political satirist)
"For decades we keep mixing the same old parties in elections. I've been doing political satire for 30 years. Show me a single point in the last 30 years where the major parties changed something for the better for the majority of the people. I can't think of one."

It summarizes two views:
1. Current politicians don't care about the people but only their own and/or business interests.
2. Politics is something that happens to you, not something you participate in. For many years all big parties have been bleeding members, and politicians have a very bad public image. At the grass roots level (local councils) you often have independent local parties on equal footing with the traditional parties.

The annexation of East Germany happened in the last 30 years.

[MadImmortalMan]

That's a pretty lenient rent control, so it shouldn't distort things.  It should stabilize more than distort.  In US, it's far more draconian where it exists, ironically enough.  Sometimes rate of inflation is the best landlords can hope for.

It's very old wisdom that real estate generates 5% annually. It used to be one of those things people just assumed. Things got weird since the 20th century though.

[Zanza]

There has always been a rule that you can't increase rent by more than 20% in 3 years. That hasn't distorted the real estate market so far.

That's a pretty lenient rent control, so it shouldn't distort things.  It should stabilize more than distort.  In US, it's far more draconian where it exists, ironically enough.  Sometimes rate of inflation is the best landlords can hope for.

I think it is possible to limit it to 15% in the hot spots, but that's still close to 5% annual rise, which is way beyond inflation (less than 1%).

[MadImmortalMan]

The cost of the property is rising that fast. Inflation may be lower, but property inflation isn't. The rising rents reflect that.