I have heard that most people rent rather than buy in Germany, but this leaves the question of who owns the houses? Is it the government, or just a small number of very rich landlords? Does anyone know the statistics on this?
I have heard that rents in germany are relatively low and they have avoided the property bubbles that have plagued so many other countries.
However they manage it, it looks to be a good system.
I contacted the UK Land Registry via email asking for a freedom of information request for a research project regarding the statistics on land ownership in the UK. I requested information on who built the houses, public and private. I only wanted to know what percentage of the houses was built via government money and what was built by private capital, no specifics. As I was interested in the way houses were built with regards to what paid for them. My theory was that government built houses have resulted in poor quality construction methods and materials being used as well as very limited size of the property. But they said that they did not have that sort of information. If you ever do come across such information for any country I would be interested in seeing it.
The following articles were written by Dr Oliver Marc Hartwich, Research Fellow at the Centre for Independent Studies in Australia. He was born in Germany, but has lived in the UK and is currently living in Australia.
The cult of Australian property
http://www.cis.org.au/media-information/opinion-pieces/article/2343-the-cult-of-australian-property
A housing market whodunit
http://www.cis.org.au/media-information/opinion-pieces/article/2358-a-housing-market-whodunit
How the Germans keep a lid on prices
This may also be of interest, written by a different economist:
How Germany achieved stable & affordable housing
http://macrobusiness.com.au/2011/06/how-germany-achieved-stable-affordable-housing/
Thanks for the article. The housing in the UK is very poor. The majority of the people do not have a lot of land and the houses are rarely detached. Most of the houses are made out of bricks and wood. There is rarely any concrete staircases or floors and poor quality plumbing. After growing up in South Africa the one thing I miss is the quality of housing. The age of the British housing is one reason for this, but I also think that the design and the way they were built was due to the public funding that built them. There are houses in the UK that are fully detached but they are seen as luxury houses that are usually very large and expensive.
I have read before that this was one of the fastest growing suburbs in the southern hemisphere when they started to expand it years ago. You can see that they have already started to build roads for further expansion. Is it only due to land restrictions that the UK built all their houses stuck together, while south africa which has a lot more space has no need to do that? It is unlikely that they will ever knock these old developments (in the uk) down and divide the land up in to larger chunks etc. Even if the UK removed the land restrictions I find it highly unlikely that they would start building better quality housing on larger pieces of land. Most of the new housing that I see going up is in the form of tower blocks or “modern” short tower block complexes. Housing is getting smaller, low quality and for more money in the UK. The new builds can get away with low quality because the quality in housing in the competition is so poor they have no reason to spend extra money.
The uk rental prices are especially affected by the public involvement in housing. In the uk they have the key worker status which practically gives the public sector workers a privileged rental property, this distorts the market. Often the properties are one and two bed room properties and what we end up with is that the supply of one and two bed room goes down. If new one and two bed room properties come on to the market (new builds) then they are at a higher price range £200 a week etc. Developers will rarely build property for the lower price range of £150 a week. While the government subsidized build projects (not to sure on the details) but some how one and two bedroom (new builds) get offered as key worker status for less than £150 a week to public employees only. But the lack of supply, especially around london causes too high prices and it would not be so bad if the quality was ok.
Sorry to rant about housing, as thread was about Germany.
ITGF, that was some excellent reading, thank you very much.
One thing those articles leave to the reader is how to figure out why Germany, in spite of its relatively favorable legislation regarding new housing, hasn’t experienced the same insane booms that affected Italy (especially the northern part) and Spain. Access to credit is probably the key answer here, as well as the cultural idea in both Italy and Spain that owning a house is an “investment”.
I think ‘expectations’ are important. During the recent housing bubble, everyone (well, almost everyone) believed that house prices would continue to rise: lenders, borrowers, investers, regulators, congress, financial advisers, etc. Perhaps such expectations do not exist in Germany, largely because house prices generally don’t increase as much as other assets.