Is the German real estate "model" better?

Sorry if I sound dumb and happy to be corrected. Once upon a time Australia was somewhat like this with a smaller population and the whole "the great Australian dream (of owing your own place)". Am I too naive to think the German is somewhat better? I've even read rightly or wrongly in Denmark landlords need reasoning in writing to justify increases.

Tenants have a lot more power and rights and there is very little incentive in being a landlord, somewhat a fairer approach? This appeals to me as somewhat you're living life rather rather than trying to accumulate loads and loads of money to live an expensive/luxurious lifestyle which is somewhat the gist I get is the goal in Australia.

 

Better and fairer are so subjective that there is no right or wrong answer. Just fights.

 

The European system favours the long term tenant and the corporate landlord. Leases are longer, tenants generally paint, carpet and sometimes put in the kitchens and bathroom. The rent can’t be increased because the place looks nicer, increases are generally specified in the lease contract. Tenants also pay rent monthly in advance and have a sense of ownership of their leased premises.
But it would not work in Australia as most of our landlords are mums and dads and land tax is a huge disincentive to locking away residential real estate for generations. Also the Australian dream is rather mediocre, “owning a home” compared to the passive income and quality of life dream that causes Europeans to buy shares.

 

Yes better socially but it ****s those who have played by the rules of the old game.

 

Can you define the benefits of the German system.?
We can than analyze the pros and cons.

 

The idea of low cost housing with our high incomes would seemingly see a big improvement to quality of life. Either more disposable income or people choosing to work less.

Would be interested in how long term decreases in property prices has affected japans way of life.

 

Sorry, what was the original argument? That tenants have more rights and power here? Or in Europe?

 

Unfortunately we're addicted to the Aussie Property Ponzi Rentseeker Scheme.

Wouldn't it be nice if our housing costs were not so expensive, and use the money for nice things in life? More travel and shiny new things and experiences.

Our properties are more expensive but not necessarily better quality. Aussie housing quality is compared to European houses but more expensive.

And our banks will be able to lend more to the non-housing sector so we can have nice industries like high-value manufacturing, technology and stuff that are actually productive.

 

You can live in a 2 bedroom apartment by the train station IN Sydney and Melbourne and be repaying a mortgage and your repayments would be $500 per week.

Please explain your argument?

Wait would you like an example of Germans social housing? Or examples of their affordable housing. If I show you may you will stop comparing the models as you would not live in alot of these ghetto style complexes.

Blocks of sardine can style apartments full of shiny staff and holidays.

Grass is always greener on the other side.

 

Would hate to see what you think of Hong Kong

 

Not a happy life in most of those apartment. Extended family members live in a 1 bedder (size of a studio here) with 4 people and a kid with rent comparable to Sydney. Exposed pipes, and bathroom with a bucket.

 

Im simply making a comparison.

Hong Kong is expensive and built up.

IF this is what you want great.
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@willister your post has several semi connected ideas/questions and I think some assumptions need to be checked before an answer is even possible (not that one really is to an inherently subjective question).

The first thing to remember is that nobody is forcing you to accumulate loads and loads of money to live an expensive lifestyle. If that is "the goal" you set for yourself then fine, go for it. But if it isn't there are lots of people who have very different goals. I left the city 10 years ago because I wanted to raise a family with a certain kind of lifestyle and I was sick of hearing myself complaining or feeling stressed. Where I live lots of people have moved to deliberately live a less consumerist more natural life. I love my business and I love real estate but I also love family time, surfing, fishing, giving money away, not being in traffic and not keeping up with the jones'. I choose these things mostly over newer cars and more expensive homes at present. Each to their own.

So first, there is no one goal, there is merely your goal. Don't ever let someone else set it for you. If you feel pressure to chase that goal, have an honest conversation with yourself about whether you want to own that or not. If you have a belief that a goal is wrong, don't chase it.

Next - you raise tenants power and rights and whether it is fair to incentivise landlords or not. I will admit I have always felt that we should allow and encourage longer term leases, it doesn't make a lot of sense to me to have everyone on 6 and 12 month agreements. If people want that, great, but if people want to sign a 3 yr lease or longer why shouldn't we? I think much of the angst tenants feel is in lack of surety about how long they can stay somewhere.

You raise the question of who gets incentivised? Australia the history of public housing policy is a very long and sad complex story but the short version is this: Govt builds mass housing for large employment projects, Projects end, Govt changes to prioritise extreme need based social housing, Govt fills housing estates with the poor so they become areas of compounding social disadvantage (I spent many years working in them as a social worker) - Govt sells properties in concentrated slums to try and undo its past actions and create a more "salt and pepper" spread of properties for the disadvantaged. Govt occasionally reverts to earlier policy model and builds a block of flats filling it with social need housing tenants. These are quickly known as the "new slums". Govt sells dwellings off to tenants who can afford in attempt to salt and pepper again. That is the basic map of the last 60 years.

Currently the Govt is not a very efficient or affordable builder of homes. The govt and our community has decided for the last 60 yrs (at least) that high private ownership was the way to go to build the homes needed and create a stable national workforce. However not all will be in a position to buy even if that is the trend, we have had approx 70% ppor 30% tenant mix for decades with the numbers gradually falling to 65% and 35% soon but has been quite stable over time. As such the Govt needed someone to build and manage rental properties. As your original post refers to European options, yes the comparison there is between corporate and individual investors as the majority landlord. I don't think one is inherently better than the other, both landlords will act in self-interest within the bounds of the law. The Govt is pragmatic, they need someone to do it, they made a set of policies decades ago and our nation has followed the path to suit. I don't believe our system creates terrible injustice more than others, you may have a differing opinion I guess.

A more interesting market to study (if you are into this sort of thing) is Singapore. They have some very different process to us and I am not saying we can copy their path because they are a very small, very rich port town nation and don't have to pay for all our distance-related infrastructure but worth checking out anyway.

I am totally into debating the cultural differences between the world's real estate markets - but I like thinking through the pros and cons of each and I don't like oversimplifications when people say one is fairer or better than another without understanding the context and historical reasons each exist. My 2c.

 

A glance at germany around 1945 tells you a lot about why the german property market is the way it is.

Politics drives policy.

 

Haha I guess I just wasted a lot of words and Trainee nailed it in 3.

 

HK is a nightmare...and probably a textbook example of one of the greatest bubbles in real estate on Earth. I feel seriously sorry for people living there.

I have friends who live there and did stints there and they say basically everyone is a "house mortgage slave".

This is somewhat reminiscent of Australia in the yesteryears. I grew up in Australia in the 80s and 90s. My folks worked in factories and afforded a 89k house. When they finished the mortgage in about a 6 year span, they didn't accumulate any more real estate except the PPOR.

The problem I think these days is that you don't need many accessories/gadgets anymore. A mobile phone and laptop is really all you need. Travelling is relatively cheap now and I think a lot of under 30s "overconsume" this. Growing up it was considered a luxury and I actually got excited over a 12 hour trip my extended family drove from Melbourne to Sydney in a 12 seater Hiace.

I never quite understood Hong Kong - yes, 20-30 years ago it was a finance hub, british rule of law etc. etc. I once visited distant relos (my mothers cousin) in 1995 as a teen and could not get over the filthy Mongkok apartment she lived in, 2 bedder worth probably in excess of 2mil AUD today. Full on concrete cladding.

If anything in Asia I'd way prefer the houses in Thailand and to some extent Malaysia over HK or China or Singapore any day.

 

So would the Chinese. Cambodia is going to soon become a province of Guangdong. I heard the Chinese embassy is bigger there than the local one..... With the economy going down in China, friends of mine are off to Thailand and Cambodia to sell apartments....

 

Mean while in London
Sadiq Khan calls for new powers to impose London rent controls

 

I don't believe it will go through.
People of London have a higher aptitude than to accept rent controls being imposed.

 

The Russian mafia will never allow it....