ᐅ The situation in the real estate market... unbelievable

nordanney schrieb:

Has this actually been the case in recent years? A young family in their early to mid-30s with a 30-year loan term (around 4.5% annuity) has a monthly payment of €1,500 and can still spend €4,500. What can this family not do that, for example, families in Düsseldorf, Frankfurt, Cologne, Munich, etc. can? There, a new apartment can quickly cost €1,500 for 100m² (about 1,080 sq ft) — so smaller than a house, and not to mention the garden and overall living experience (which is the main argument for most homeowners).

For me, it does...
Calculations are always tricky.
Let’s not consider €6,000 or €4,000, but rather the middle ground: €5,000.

Example:
Mortgage payment – 1,500
2 cars – 1,000
Daycare – 500
All insurances – 400
Home savings – 200
Food for 4 – 1,000
Clothing all in – 200
Private pension – 300
House utilities/operating costs – 250

That already adds up to €5,350.

Now the family obviously needs to bring home €5,000 net while one partner works part-time.

Moreover, there are other significant expenses not even listed here that you might want or need to pause for a year — these last longer.
On top of that, birthdays, Christmas, Easter, Saint Nicholas, sports clubs, orthodontics, school trips, etc...

And the family hasn’t even taken a vacation yet.

So, even with €6,000 income, it doesn’t look very comfortable to me personally. (It should be, at €6,000 gross.)

Sure, can you finance €400,000 with €6,000? Yes! But for ME, comfortable looks different.
I mean, if I already have a job that pays that well, I need to perform above average. And if I perform above average, I want to live comfortably on all levels. At least, that’s how I see it.

Now imagine the loan is not €400,000 but €500,000 or more...

Again, comfortable looks different to ME personally.

Bookstar schrieb:

It’s really just a feeling.

May I turn the question around?
In other words, what do you think the figures look like for the “average-earning” house planners?

Farilo schrieb:

Example:
Mortgage payment – 1500
2 cars – 1000
Daycare – 500
All insurance – 400
House savings – 200
Food for 4 – 1000
Clothing all-in – 200
Private pension – 300
House utilities – 250

That adds up to 5,350.

But you can also calculate it differently:
- Only 1 regular car: 300
- Daycare may be eliminated quickly or not even charged by the city
- No direct savings because it’s a new build
This brings the example calculation to 3,950. That fits easily with a 5k net income plus child benefit.

Farilo schrieb:

Example:
Mortgage - 1,500
2 Cars - 1,000
Daycare - 500
All insurances - 400
House savings - 200
Food for 4 - 1,000
Clothing all-in - 200
Private pension - 300
House utilities: 250

That adds up to 5,350.

Now, if I replace the mortgage with rent of €1,500 (about $1,600) and remove the house savings (although tenants will also need savings for rent increases over the years), it comes “just” to €5,150 (about $5,500).

So please explain to me how the tenant is better off? The homeowner at least saves €1,000 (about $1,070) every month through loan repayment. If the tenant wants to save the same €1,000, the total suddenly becomes €6,150 (about $6,600). Crazy, right? And that’s just for a modest apartment.

If you’re going to make a calculation, please include a comparative calculation.

What is the point of these generalizations? For concrete figures, there is specific advice available, even here in the finance thread, and it often tends to be overly cautious.
I just don’t find it helpful not to differentiate. For example: 2 cars = 1000 euros/month. We both commute and together (yes, including proportional taxes and so on) we pay 500–550 euros/month (about 590–650 USD). So what? Insurance is the same. And so on. Each case really needs to be considered individually to give accurate advice; otherwise, it’s just speculation and assumptions.

nordanney schrieb:

Then I’ll just swap the mortgage for €1,500 rent and remove the savings for the house (which the tenant will also need over the years due to rent increases) and end up with “just” €5,150.

Now please explain to me how the tenant is better off? At least the homeowner saves €1,000 a month on the loan repayment. If the tenant also wants to save €1,000, they end up with “just” €6,150. Crazy, right? And that’s with a lousy apartment

If you’re going to make a calculation, then please include a comparison calculation.

Hi Norderney,
Well, your assumption that, for example, the apartment should offer exactly the same luxury as the house is “not my assumption.”

I can live very well with four people in a 3.5-room apartment for €1,000 (around $1,100 USD) including utilities. (A friend from Kiel, for some reason, moved to Hamburg four months ago. He acquired cooperative shares for €4,000 (about $4,400 USD) and now rents a 3-room apartment at the fish market for €750 (about $825 USD) including utilities!)

Here is the comparison calculation you asked for:

Rent – €1,000 (including utilities!)
Mobility (instead of 2 cars) – €300
Childcare – €500
All insurance – €400
Apartment reserves – €100
Food for 4 – €1,000
Clothing all-inclusive – €200
Private pension – €300
Additional apartment costs – included in rent

That adds up to about €3,800 (roughly $4,200 USD).
With a €5,000 gross salary, that leaves €1,200 (about $1,320 USD) for everything else, including holidays.

Meanwhile, the family lives at the fish market in Hamburg, doesn’t have to fear huge rent increases (due to the cooperative), has short distances, and so on.
So, to me, that doesn’t look like a bad life at all.

Of course, you have to like or be able to cope with city life. But it’s the same in the countryside — you have to like or be able to cope with that, too.

As for the €1,000 for 2 cars, I took that figure from this forum, where €500 per car is commonly quoted. This value includes everything related to the car.
If someone says, “I only pay €150, because I got the car as a gift,” then we might as well assume that they owe €150,000 (about $165,000 USD) in debt inherited from deceased parents. (Which is obviously nonsense.)
So we assume that everything needs to be purchased either new or used.