Interesting article on the cost of housing, government interference, and the results on the economy: https://www.forbes.com/sites/eamonnfingleton/2014/02/02/in-worlds-best-run-economy-home-prices-just-keep-falling-because-thats-what-home-prices-are-supposed-to-do/#276eb3436ad0
QuoteRather than keep their noses out of the economy, German officials glory in influencing market outcomes. While the Goerlitz authorities are probably exceptional in the degree to which they micromanage house prices, a fundamental principle of German economics is to keep housing costs stable and affordable.
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
Although conventional wisdom in the English-speaking world holds that bureaucratic intervention in prices makes for subpar outcomes, the fact is that the German economy is by any standards one of the world's most successful. Just how successful is apparent in, for instance, international trade. At $238 billion in 2012, Germany's current account surplus was the world's largest. On a per-capita basis it was nearly 15 times China's and was achieved while German workers were paid some of the world's highest wages. Meanwhile German GDP growth has been among the highest of major economies in the last ten years and unemployment has been among the lowest.
It seems to suggest a positive outcome from direct government intervention in the economy.
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Quote
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
I may have made a terrible mistake. I should go learn German.
Quote from: Valmy on June 28, 2017, 12:06:29 PM
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Quote
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
I may have made a terrible mistake. I should go learn German.
Wow, maybe I'll retire to the ancestral homeland of Rhineland instead of Argentina.
Quote from: derspiess on June 28, 2017, 12:19:08 PM
Quote from: Valmy on June 28, 2017, 12:06:29 PM
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Quote
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
I may have made a terrible mistake. I should go learn German.
Wow, maybe I'll retire to the ancestral homeland of Rhineland instead of Argentina.
Detroit has cheap housing. :)
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Interesting article on the cost of housing, government interference, and the results on the economy: https://www.forbes.com/sites/eamonnfingleton/2014/02/02/in-worlds-best-run-economy-home-prices-just-keep-falling-because-thats-what-home-prices-are-supposed-to-do/#276eb3436ad0
QuoteRather than keep their noses out of the economy, German officials glory in influencing market outcomes. While the Goerlitz authorities are probably exceptional in the degree to which they micromanage house prices, a fundamental principle of German economics is to keep housing costs stable and affordable.
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
Although conventional wisdom in the English-speaking world holds that bureaucratic intervention in prices makes for subpar outcomes, the fact is that the German economy is by any standards one of the world's most successful. Just how successful is apparent in, for instance, international trade. At $238 billion in 2012, Germany's current account surplus was the world's largest. On a per-capita basis it was nearly 15 times China's and was achieved while German workers were paid some of the world's highest wages. Meanwhile German GDP growth has been among the highest of major economies in the last ten years and unemployment has been among the lowest.
It seems to suggest a positive outcome from direct government intervention in the economy.
The problem is the old one of attributing causation. The article implies (hell, pretty well outright
states) that German economic success is
caused by German interference in the housing market to make houses affordable.
I didn't see any proof of that, though.
What if causation goes the other way around - if German economic success means that Germany can
afford policies that interfere in the housing market and make houses affordable?
A shame the article glosses over the federal payment to municipalities and the housing consumption tax.
Quote from: Malthus on June 28, 2017, 12:47:26 PM
The problem is the old one of attributing causation. The article implies (hell, pretty well outright states) that German economic success is caused by German interference in the housing market to make houses affordable.
Somehow, I think the Marshall plan had something to do with German economic success.
Quote from: Admiral Yi on June 28, 2017, 01:13:21 PM
A shame the article glosses over the federal payment to municipalities and the housing consumption tax.
yeah, and also that prices are kept down by the government making sure there is always land available to build. Germany produces less&less agricultural products relying instead on eastern europe for that. Not sure that system could be exported to the United Kingdom, Canada or the US. There's already a lot of pressure on agricultural lands.
Quote from: viper37 on June 28, 2017, 02:42:48 PM
yeah, and also that prices are kept down by the government making sure there is always land available to build. Germany produces less&less agricultural products relying instead on eastern europe for that. Not sure that system could be exported to the United Kingdom, Canada or the US. There's already a lot of pressure on agricultural lands.
It would be no problem in the US. We have plenty of land.
Quote from: Malthus on June 28, 2017, 12:47:26 PM
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Interesting article on the cost of housing, government interference, and the results on the economy: https://www.forbes.com/sites/eamonnfingleton/2014/02/02/in-worlds-best-run-economy-home-prices-just-keep-falling-because-thats-what-home-prices-are-supposed-to-do/#276eb3436ad0
QuoteRather than keep their noses out of the economy, German officials glory in influencing market outcomes. While the Goerlitz authorities are probably exceptional in the degree to which they micromanage house prices, a fundamental principle of German economics is to keep housing costs stable and affordable.
It is hard to quarrel with the results. On figures cited in 2012 by the British housing consultant Colin Wiles, one-bedroom apartments in Berlin were then selling for as little as $55,000, and four-bedroom detached houses in the Rhineland for just $80,000. Broadly equivalent properties in New York City and Silicon Valley were selling for as much as ten times higher.
Although conventional wisdom in the English-speaking world holds that bureaucratic intervention in prices makes for subpar outcomes, the fact is that the German economy is by any standards one of the world’s most successful. Just how successful is apparent in, for instance, international trade. At $238 billion in 2012, Germany’s current account surplus was the world’s largest. On a per-capita basis it was nearly 15 times China’s and was achieved while German workers were paid some of the world’s highest wages. Meanwhile German GDP growth has been among the highest of major economies in the last ten years and unemployment has been among the lowest.
It seems to suggest a positive outcome from direct government intervention in the economy.
The problem is the old one of attributing causation. The article implies (hell, pretty well outright states) that German economic success is caused by German interference in the housing market to make houses affordable.
I didn't see any proof of that, though.
What if causation goes the other way around - if German economic success means that Germany can afford policies that interfere in the housing market and make houses affordable?
A homeowner would try to keep the prices high. You're the enemy <_< :P
Quote from: Admiral Yi on June 28, 2017, 02:45:42 PM
Quote from: viper37 on June 28, 2017, 02:42:48 PM
yeah, and also that prices are kept down by the government making sure there is always land available to build. Germany produces less&less agricultural products relying instead on eastern europe for that. Not sure that system could be exported to the United Kingdom, Canada or the US. There's already a lot of pressure on agricultural lands.
It would be no problem in the US. We have plenty of land.
True, but a lot of it isn't good for agriculture. Even a lot of our most productive farmland depends on irrigation.
Ideally, you'd build the housing on the less productive land, though that makes the distribution system critical. Of course, in some ways, we're already there, and shipping foodstuffs from the Great Plains or California's Imperial Valley to, say, Boston is shipping them further than shipping them from Eastern Europe to Germany. OTOH, we have paved over a lot of good farmland to build housing subdivisions and malls.
Quote from: Admiral Yi on June 28, 2017, 02:45:42 PM
It would be no problem in the US. We have plenty of land.
Having land in Dakota is not useful for someone working in New York.
Quote from: Jacob on June 28, 2017, 11:55:27 AM
Rather than keep their noses out of the economy, German officials glory in influencing market outcomes. While the Goerlitz authorities are probably exceptional in the degree to which they micromanage house prices, a fundamental principle of German economics is to keep housing costs stable and affordable.
Görlitz perhaps because it sits on the Polish border. But in urban areas like Munich, Frankfurt, Stuttgart or by now even Berlin, prices have grown way faster than income growth since the financial crisis. There is a bubble growing thanks to the no interest monetary policy. Munich especially is not affordable for average earners anymore.
QuoteAlthough conventional wisdom in the English-speaking world holds that bureaucratic intervention in prices makes for subpar outcomes, the fact is that the German economy is by any standards one of the world's most successful. Just how successful is apparent in, for instance, international trade. At $238 billion in 2012, Germany's current account surplus was the world's largest. On a per-capita basis it was nearly 15 times China's and was achieved while German workers were paid some of the world's highest wages. Meanwhile German GDP growth has been among the highest of major economies in the last ten years and unemployment has been among the lowest.
Those figures show an unbalanced economy, not a outstandingly successful one.
QuoteIt seems to suggest a positive outcome from direct government intervention in the economy.
There are good arguments for a strong role of the government in the economy, but the quoted part is not it. Read books by Ha Joon Chang for a good argument.
Quote from: viper37 on June 28, 2017, 02:42:48 PM
yeah, and also that prices are kept down by the government making sure there is always land available to build. Germany produces less&less agricultural products relying instead on eastern europe for that.
I doubt that. As far as I know the heavily industrialized agriculture here exports lots of meat, milk etc. Do you have a source for less output?
Quote from: Zanza on June 28, 2017, 05:06:37 PM
There are good arguments for a strong role of the government in the economy, but the quoted part is not it. Read books by Ha Joon Chang for a good argument.
Could you recommend one or two as a starting point?
Quote from: Admiral Yi on June 28, 2017, 01:13:21 PM
A shame the article glosses over the federal payment to municipalities and the housing consumption tax.
There is a steep one time tax when you buy real estate, e.g. 5% of the net price where I live. But ownership itself has no ongoing consumption tax although you have to pay property tax (which isn't high).
@Jacob: I liked "23 things they don't tell you about capitalism".
Edit: Would be interesting what Minsky thinks of him.
Heard of him but haven't read the books.
On the OP it's silly to compare Berlin to NY or London. As a city of culture sure but not as a business/financial center.
But it has OKW HQ!
I thought Germany had a big culture of renting rather than buying?
Someone didn't read the assignment.
Quote from: Zanza on June 28, 2017, 05:08:47 PM
Do you have a source for less output?
http://ec.europa.eu/eurostat/statistics-explained/index.php/Agricultural_census_in_Germany
Less people on farms, smallest part of the economy for EU countries, generally less output, though it depends on what.
And imports seem on the rise:
https://tradingeconomics.com/germany/imports-of-agricultural-products
Agricultural output hasn't been an issue in Europe for ages. I mean, farmers are sometimes paid NOT to grow stuff in order to keep prices afloat. Is stuff still imported? Of course, as most probably it'll be cheaper to bring it over from other countries. And even taking all that into account, Germany is still the 2nd main producer of cereals in the EU after France.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fec.europa.eu%2Feurostat%2Fstatistics-explained%2Fimages%2F4%2F40%2FProduction_of_cereals_by_main_producing_EU_Member_States%252C_2015_%2528%2525_of_EU-28_total%2529.png&hash=6aa2c75754ba37a1f14794534258be9be110ee68)
Wheat accounts for almost 50% of the total cereal production in the EU, barley and maize are a tad less than 20% each.
Moreover, agricultural land is not where housing construction is needed, so I can't see how one could affect the other.
Quote from: HVC on June 28, 2017, 02:57:11 PM
A homeowner would try to keep the prices high. You're the enemy <_< :P
Actually - no. :P
A homeowner wishing to fund his or her retirement by selling the house and "downsizing" certainly does.
A homeowner intending to stay in the home for a long time wants prices low. Because your property tax is tied to house values.
A homeowner who wants to move into a more expensive home wants prices low also - the difference between the value of what he or she owns, and what he or she wants to buy, will then be smaller.
you can't trick me with your lawyery ways uber-canuck
Taxation is theft
Quote from: Ed Anger on June 29, 2017, 08:15:06 AM
Taxation is theft
You're doing it wrong. Watch this:
Taxation is theft.
Quote from: Malthus on June 29, 2017, 07:48:52 AM
A homeowner intending to stay in the home for a long time wants prices low. Because your property tax is tied to house values.
That is a popular misconception. Property taxes are based on a mill rate. If all property value increased at the same rate all property taxes would remain the same. Even though Vancouver property values have increased rapidly, some people actually experienced a decrease in property tax because their properties did not increase as much as others.
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
Quote from: crazy canuck on June 29, 2017, 08:30:12 AM
Quote from: Malthus on June 29, 2017, 07:48:52 AM
A homeowner intending to stay in the home for a long time wants prices low. Because your property tax is tied to house values.
That is a popular misconception. Property taxes are based on a mill rate. If all property value increased at the same rate all property taxes would remain the same. Even though Vancouver property values have increased rapidly, some people actually experienced a decrease in property tax because their properties did not increase as much as others.
Then homeowners want
their particular property to be low value.
Quote from: Ed Anger on June 29, 2017, 08:30:14 AM
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
you need to spit and fiddle with a gun or rifle of some sort.
Quote from: Malthus on June 29, 2017, 08:39:59 AM
Quote from: crazy canuck on June 29, 2017, 08:30:12 AM
Quote from: Malthus on June 29, 2017, 07:48:52 AM
A homeowner intending to stay in the home for a long time wants prices low. Because your property tax is tied to house values.
That is a popular misconception. Property taxes are based on a mill rate. If all property value increased at the same rate all property taxes would remain the same. Even though Vancouver property values have increased rapidly, some people actually experienced a decrease in property tax because their properties did not increase as much as others.
Huh?
http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=25d4d85a42c74510VgnVCM10000071d60f89RCRD
QuoteResidential Properties
The City levy has been calculated by multiplying your property's 2017 phased-in assessment by the City's tax rate, as approved by Toronto City Council.
The education levy is calculated by multiplying your 2017 phased-in assessment by the education tax rate, as set by the Province of Ontario.
The City Building fund is calculated by multiplying your 2017 phased-in assessment by the City Building fund levy, as approved by Toronto City Council.
...
Example:
Estimated taxes on a residential property with an Assessed Value of $587,471
Estimated property tax = Assessed Value x Residential Tax Rate
= $587,471 x 0.6616472%
= $3,886.98
Personal anecdote: my property was assessed as being (much) more valuable last year than the year before, so my taxes went up; I appealed the assessment; I won. My taxes went down.
It is all tied to the assessed value of the property. If your property is more valuable - you pay more. At least, here.
Maybe in some theoretical universe the rate would go down if all properties became more valuable simultaneously, but I've never actually experienced that ...
If property values in Toronto increased by say 30%, are you suggesting that the city received 30% more tax revenue. I think that even Toronto would use a mill rate ;)
Quote from: crazy canuck on June 29, 2017, 08:49:33 AM
If property values in Toronto increased by say 30%, are you suggesting that the city received 30% more tax revenue. I think that even Toronto would use a mill rate ;)
I'm sure city council could find a way to waste 30% more money, if they really tried. :lol:
However, point taken: what stay at home homeowners really want, is for
their particular property to be low value. If
everyone elses' property increases in value, so much the better.
Their own property increasing in value = more taxes.
Quote from: Tyr on June 29, 2017, 12:49:34 AM
I thought Germany had a big culture of renting rather than buying?
Plus rent control e.g rent mirror.
Quote from: The Larch on June 29, 2017, 05:38:32 AM
Moreover, agricultural land is not where housing construction is needed, so I can't see how one could affect the other.
the article said the government was giving new lands to the cities to build more houses. I assumed they would be agricultural lands, or forest lands. But it's possible they converted old industrial sites not needed anymore in eastern germany. Or they drain marshes. I'm not an expert in Germany's geography and economy, I'm just guessing from what I read.
Quote from: Duque de Bragança on June 29, 2017, 09:59:58 AM
Quote from: Tyr on June 29, 2017, 12:49:34 AM
I thought Germany had a big culture of renting rather than buying?
Plus rent control e.g rent mirror.
Does not work as there are very few complaints against price gouging by landlords.
Quote from: Zanza on June 29, 2017, 04:02:41 PM
Quote from: Duque de Bragança on June 29, 2017, 09:59:58 AM
Quote from: Tyr on June 29, 2017, 12:49:34 AM
I thought Germany had a big culture of renting rather than buying?
Plus rent control e.g rent mirror.
Does not work as there are very few complaints against price gouging by landlords.
Well, Tyr and I think of London and Paris prices respectively I believe, so Germany is obviously much better. I mean, Frankfurt rents are or used to be half of Parisian rents. Then I also heard from people who stayed there that gentrification also started to mess things up there, even in the red light district near the Hauptbahnhof.
:lol:
Poor Spicy.
Quote from: Ed Anger on June 29, 2017, 08:30:14 AM
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
Helicopter rides is a start, even though I've never said that myself.
I did write "taxation is theft" on the tip line for dinner tonight. Then I tipped 30% in cash. Gal earned it.
Quote from: derspiess on July 01, 2017, 08:39:26 PM
Quote from: Ed Anger on June 29, 2017, 08:30:14 AM
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
Helicopter rides is a start, even though I've never said that myself.
Pinochet up a thread on a web forum. It's hilarious.
Quote from: Ed Anger on July 01, 2017, 08:42:01 PM
Quote from: derspiess on July 01, 2017, 08:39:26 PM
Quote from: Ed Anger on June 29, 2017, 08:30:14 AM
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
Helicopter rides is a start, even though I've never said that myself.
Pinochet up a thread on a web forum. It's hilarious.
Did that on EU, if not here as well.
Also did that with some if the in-laws. Did not go as well.
Quote from: derspiess on July 01, 2017, 08:44:15 PM
Quote from: Ed Anger on July 01, 2017, 08:42:01 PM
Quote from: derspiess on July 01, 2017, 08:39:26 PM
Quote from: Ed Anger on June 29, 2017, 08:30:14 AM
Spicy:
What? I need to say it with a lisp? Mention helicopter rides?
Helicopter rides is a start, even though I've never said that myself.
Pinochet up a thread on a web forum. It's hilarious.
Did that on EU, if not here as well.
Also did that with some if the in-laws. Did not go as well.
Spicy talking to his in-laws:
HEY YOU GREASY BASTARDS! YOU NEED A HELICOPTER RIDE.