ᐅ The situation in the real estate market... unbelievable
Created on: 12 Nov 2019 18:29
R
Reinhard84.2
Hello everyone,
We are currently looking for a property in the Lower Rhine region, which is not a particularly sought-after area, but unfortunately, the prices are not any better than in eastern Germany. When calling several real estate agents, they mentioned up to 50 viewings scheduled for one property. This was for a standard semi-detached house with a somewhat larger plot. I get the impression that as soon as a house has a garden bigger than a chicken coop, the interest is incredible.
Of course, the municipalities are not designating any new building land, as that would spoil the surroundings… (to what extent that is still possible is left to their imagination). This naturally has the convenient side effect that existing building plots and older properties are insanely expensive.
You can probably wait half a lifetime for the supposed recession, falling prices, and available properties. It’s all frustrating and a real pity.
Thanks for listening.
We are currently looking for a property in the Lower Rhine region, which is not a particularly sought-after area, but unfortunately, the prices are not any better than in eastern Germany. When calling several real estate agents, they mentioned up to 50 viewings scheduled for one property. This was for a standard semi-detached house with a somewhat larger plot. I get the impression that as soon as a house has a garden bigger than a chicken coop, the interest is incredible.
Of course, the municipalities are not designating any new building land, as that would spoil the surroundings… (to what extent that is still possible is left to their imagination). This naturally has the convenient side effect that existing building plots and older properties are insanely expensive.
You can probably wait half a lifetime for the supposed recession, falling prices, and available properties. It’s all frustrating and a real pity.
Thanks for listening.
S
saralina8720 Nov 2019 15:55Bookstar schrieb:
I’d like to say everything was better in the past, though I’m not sure if that’s true. The fact is, when I was growing up, only one person needed to work and the house was larger, well-equipped, and we went on vacations. New cars were also common in the driveway. All of this wasn’t a problem, even with very high loan interest rates.
Fact 2: Today, despite almost zero interest rates, that’s no longer possible. The main reasons are the real estate market bubble and the slow wage growth. But also, the welfare system costs money and needs to be funded; those in need are no longer just local residents but people from around the world.
Inefficient planning has turned the energy transition and infrastructure projects into disasters.
Yet, the average German continues debating disposable cups and gender equality, watches shows like Queen of Drags on the couch, and comfortably enjoys a glass of wine or a bottle of beer.
Life is good, even without money.First-class small talk like this—I really love it.
M
Matthew0320 Nov 2019 15:59Farilo schrieb:
Your perspective on things is valid. Mine is too, though. I never denied that.
Farilo schrieb:
Although I have to admit, I find it hard to believe that you sleep just as well whether you have to pay off 300,000 in debt or 100,000 or even 20,000...
How would you even know that?! I mean, have you ever slept in your own home knowing you no longer have a loan to repay? Maybe... I find this part unfortunate and deliberately provocative.
You can believe it or not, but knowing our interest rate is fixed until the end made everything fine for me, and I don’t waste a second thinking about the financing or the remaining debt amount. It makes no difference to me whether it’s 100,000 or 300,000—that doesn’t affect me, it doesn’t weigh on me, it plays no role in everyday life.
What matters is what I have to pay regularly, which I can calculate precisely, and I manage that very well. That’s it.
I don’t care about the unnecessarily condescending tone in your last sentence either.
But again: there are plenty of valid arguments in favor of renting as well. For me, though, the points you mentioned here count less...
nordanney schrieb:
Net income €4,000 (thousand) including child benefits (excluding Christmas bonus/holiday pay); if those are included, it’s €4,400 (thousand) annually.
New building loan €350,000 = €1,300 monthly
House additional costs = €250 monthly
One car = €250 monthly
Kindergarten for 1 child = €200 monthly
Living expenses = €1,400 monthly
Insurance = €200 monthly
Total: €3,600 monthly
==> Savings/holidays/fun = €800 monthly That’s great. Now I can “complain” a bit about the costs.
1) With a €350,000 (thousand) building loan you’re not far from the figure I mentioned… (I said that over €300,000 “wouldn’t be wise”).
2) The car at €250 is another thing… Already paid off? Free fuel? No repairs needed ever? Someone else in other threads listed quite precisely that an average yearly car really costs about €500 per month.
3) I assumed 2 children in my example, you have 1. (However, your living expenses for 3 people are higher than mine for 4. Okay.)
4) I find €200 for insurance a bit low. The house needs to be insured. Then many have disability insurance and life insurance, legal protection, and a small supplementary health insurance (single room, etc.). And that for both adults. So I’d add at least another €150.
5) To me, savings should be considered fixed costs as well. Let’s say €200.
So that adds about €550. (I calculated €400 for the car instead of €250.)
That’s a total of €4,150 in fixed costs.
Vacations and so on are extra.
Is that doable? Sure!
Does it have to be so tight? In my opinion, no. But I guess that’s where we differ…
Farilo schrieb:
Mortgage payment – 1,500
2 cars – 1,000
Daycare – 500
All insurance – 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 all at once.
Now the family obviously has to earn 5,000 net income while one partner works part-time. The calculation only works if the numbers used are accurate. Makes sense.
Two cars cost us about 400€ (approx. $440), not 1,000€ (approx. $1,100).
Daycare is 150€ (approx. $165) for both, plus a little money for food.
Insurance without car is about 60€ (approx. $66). Car insurance is already included in the 400€ (approx. $440) above.
Food for four including toiletries is about 600€ (approx. $660), no discount stores.
So what now?
It’s simply individual.
The amount of debt doesn’t really matter at first. Whether it’s $300k or $500k, it’s just a number. I sleep well, even though my figures would seriously worry half the people.
The reason I can sleep calmly is that the house is located in a desirable area, the purchase price was low, and I can safely sell the house without financial strain if necessary. That might not be the case with a new build. Another existing property I once considered buying was so expensive that even 10 years down the line it was unclear whether I would recoup the purchase price.
Aside from the resale value, the total amount really doesn’t matter to me. The monthly payment fits my budget, and I have only moderately speculated on the fixed loan term. I sleep peacefully. Quite the opposite of the unease I feel about stock prices, since I will need that money soon.
The reason I can sleep calmly is that the house is located in a desirable area, the purchase price was low, and I can safely sell the house without financial strain if necessary. That might not be the case with a new build. Another existing property I once considered buying was so expensive that even 10 years down the line it was unclear whether I would recoup the purchase price.
Aside from the resale value, the total amount really doesn’t matter to me. The monthly payment fits my budget, and I have only moderately speculated on the fixed loan term. I sleep peacefully. Quite the opposite of the unease I feel about stock prices, since I will need that money soon.
Matthew03 schrieb:
I never denied that either Neither did I
Matthew03 schrieb:
I do find this paragraph disappointing now, also deliberately provocative. Provocative in the sense of “Hey, maybe reconsider your statement,” yes.
I don’t see what is objectionable about that.
Matthew03 schrieb:
You can believe it or not, knowing that our interest rate is fixed until the end made everything fine for me, and I don’t waste a second thinking about the financing or the remaining debt balance. It doesn’t matter to me whether it’s 100k or 300k; I don’t feel it, it doesn’t burden me, it plays no role in everyday life.
What matters is what I have to pay, which I can calculate precisely, and I’m very comfortable with that. Done. I can understand and believe that.
However, for some, there is more than just “I’m managing.” Ultimate freedom probably doesn’t exist… but everyone tries to get as close as possible to it. And in my opinion, choosing to live with, for example, 450k in debt is not the best path to that.
Matthew03 schrieb:
I don’t care about the unnecessarily arrogant tone in your last sentence either So, is it completely unimaginable for you that someone who once owned an almost fully paid-off house now chooses to buy another one that they will have to pay off over 30 years or more? (Divorce, death, wrong decisions, helping family members, etc., etc. There are a thousand reasons why that could happen).
If so, that actually supports my argument.
I didn’t find anything arrogant in my statement. But I understand how you might perceive it that way. It was definitely not intended that way.