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Everything posted by Hutcho

  1. Bavaria and the real estate bubble

    That isn't a Wertstoffhof, it's a sewage treatment plant.  It doesn't really affect anyone in Freimann, it's more just this small Siedlung behind the Autobahn wall, which is probably one of the only places in Munich you could get a big house with a garden for 2500 euros a month.
  2. Bavaria and the real estate bubble

    I'm not sure what Wertstoffhof you're talking about. Freimann is very well connected if you're near the U-Bahn, but all the places closer to the Englischer Garten are quite a way away from it.
  3. Bavaria and the real estate bubble

    This place is 30 years old and is in a public transport black hole, it certainly isn't worth 1.5 million to 2 million euros.  Unfortunately nothing selling right in that area now, but here's one not far away selling for a million with similar specs.    So I suspect this place is only worth half to two thirds of the amount you were mentioning, which is reflected in the rent.
  4. Bavaria and the real estate bubble

    Your profile says Freimann, so I picked that, but feel free to show us a few new built houses with garden, close to the U-Bahn in Munich worth between 1.5 and 2 million euros that is renting for 2500 euros a month. I've provided you concrete examples of how this is not the case. Until you provide some proof instead of simply excuses, I'll stick by my opinion that it is you that doesn't understand the Munich real estate market, not the rest of us.
  5. Bavaria and the real estate bubble

      House prices here also didn't go down in 2008.  I specifically said this happened in other parts of the world.
  6. Bavaria and the real estate bubble

      If house prices cut in half, rent prices will not be far behind.  Again, unlikely, but this is exactly what happened in plenty of places around the world during the 2008 crash.
  7. Bavaria and the real estate bubble

      It's not really a 14% return though, because he is taking on a lot of risk.  If things go well, he multiplies his win, but if things go bad, he gets really screwed.  If conditions go back to how they were 10 years ago, the house price could be cut in half.  It's of course unlikely, but if that happens not only does he lose all of his 100k, but owes the bank another half a million as well.   He's basically like the guy that goes to the casino and places a $1 chip on every number except number 1 on the roulette board.  He'll win almost all of the time, but the one time in 35 that it lands on that 1, it wipes him out completely.
  8. Bavaria and the real estate bubble

      Please prove otherwise then.   Currently there is only a single house in Freimann for rent - it costs 3100 euros cold, and was built in 1988, so it's certainly not new and the U-Bahn is still 2km away!
  9. Bavaria and the real estate bubble

      Just another reason I think you'd be crazy to be a landlord in Munich or Germany for that matter.
  10. Bavaria and the real estate bubble

      It is indeed pretty idiotic because one way to easily kick renters out is to claim "Eigennutzung", which would be completely valid if your kids wanted to move in.
  11. Bavaria and the real estate bubble

    Rates for 20 years are currently around 1.2% if you put 30% down or 1.7% if you put nothing down (taken from   So if you put nothing down, your interest payments would be 2125 euros a month, and if you put 450k (30%) down, your interest payments would be 1050 euros a month.   Even at 2125 euros, it's cheaper than renting (rent on a 1.5 million euro house would be close to 3000 euros a month given the example I showed before).  Of course, there are maintenance costs, extra fees when buying etc which probably make it fairly similar in the end, assuming house prices don't go up further.
  12. Bavaria and the real estate bubble

      I'm not sure what you want me to show here.  In the post I gave two links to immoscout24 which showed basically the same apartment in the same location, one for sale for a million, and one for rent for 2k a month.  That is a fair representation of the current market. I'm glad you're getting such a great deal on your place, but that doesn't really mean anything.  Fact is, you can pay 2k a month right now in rent for a place you could get for another 2k a month with a 1.5% interest loan locked in for 30 years with 1% Tilgung on a million euros.  There isn't much in it. Of course, there are advantages and disadvantages to both, and I'm not advocating either.  One thing I would advocate is not being a landlord under the current conditions.  You'll get a shitty return and likely get screwed by your tenants because of their rights, which are only getting stronger (get ready for even tougher rent caps, which will only make this whole problem worse).  You can get a 2% return that is a lot less hassle in plenty of other places, and I don't see the house prices going up significantly so you're probably out of luck there (of course, I could be wrong, but that's how I see it right now).
  13. Bavaria and the real estate bubble

    I'm not advocating renting or buying.  At the moment, rent is far more reasonable than the prices of houses.  But your maths above are certainly skewed.  I don't know what amazing deal you're on, but it's not normal.    An 90sqm apartment in a good location in Munich would cost around a million, and would rent for 2k a month. Given the low interest rates, your repayments vs rent are not going to be that much different in most cases now.  Whether you want to take the negatives you mention regarding buying (or the positives that might also come from it, like they have in the last decade) is up to you.  
  14. Bavaria and the real estate bubble

    I agree 100%.  I'm actually not suggesting that stocks, houses or anything else is a good investment.  What I'm arguing against here are people saying that one way is right or wrong.  The example I gave was merely a rebuttal to lisa13 who was suggesting that buying a million euro house that you could never pay back makes no sense: it can indeed make a lot of sense - or it can destroy you.   But just saving money in the bank, especially at current negative interest rates and in times of quantitative easing is almost certainly not the right idea.
  15. Bavaria and the real estate bubble

    It of course sucks if this happens, but if most of your retirement savings are in an investment (as they should be), you start to draw parts of it out a few years before you retire to ensure you can live, so that when it tanks you're not stuck in a hard place. Sure, you might need to draw out money at a bad time.  But has she rebalanced in the 2000's and kept the money in there, she'd have quadrupled her money by now.
  16. Bavaria and the real estate bubble

      What happened in the past is absolutely no indicator of what will happen in the future.  If you're putting your financial security solely in the hands of the German state, I think you're asking for trouble.
  17. Bavaria and the real estate bubble

      Money in the bank is much more imaginary than holding stock or property.  Look what is happening in Venezuela now, and what happened in Germany during the depression, and indeed what they're doing now with quantitative easing.  Cash in the bank, especially at negative interest rates, is your least safe option at the moment.
  18. Bavaria and the real estate bubble

      You say it's nuts to buy a house for a million that you could never pay off, but had you done it 10 years ago, your house would now be worth 3 million euros, so if you run into financial troubles you could sell it, pay off your loan and still have 2 million euros in the bank and you'd have lived 10 years in a really nice house rather than a small shitty apartment.  Sounds like a good deal to me. Living conservatively in the way you suggest, with basically cash under the mattress, is really not so smart, just like cashing out your pension during the dotcom crash.  It's not as straight forward as you make it out to be, and it is necessary to take some risk if you want to get ahead.
  19. Bavaria and the real estate bubble

      That's a pretty bold statement.  If you invested 5 years ago it certainly wasn't stupid (10 or 15 years ago even less stupid), and we'll have to wait another 5 years to see if you're correct, but I can't imagine that the housing market will do significantly worse than the stock market, which is certainly due for a correction soon.   Unfortunately I can't see prices going down unless Munich itself takes a massive turn for the worst which would be bad for us all, and much worse than simply high housing prices.  It might happen with the automated driving revolution that will hit us soon, that will likely be dominated by American tech companies not traditional automakers which could hit a significant part of the industry in Munich.  But like I say, the decline of Audi/BMW/VW is not something we should excite ourselves about.
  20. Bavaria and the real estate bubble

    The leverage you got by earning a profit on a loan was certainly advantageous in this case, but it also involves higher risk.  If your house value halved and you had a 90% loan, you'd owe the bank money.  You might think this sounds unrealistic, but it's exactly what happened in the US in 2008 to thousands of people who ended up going bankrupt (along with banks because of their risky loans) because their house was worth much less than their loan.   You can also leverage in the stock market like this, if you're willing to take the bigger loss.
  21. Bavaria and the real estate bubble

      Had you invested in the stock market at that time, your money would have doubled as well.  Had you invested in property in 2000 and sold in 2010, you'd have made no profit and you'd have been better off renting. Of course no one can predict the economic future.  Even Warren Buffet admits that someone investing regularly into solid Dow Jones/S&P 100 companies will beat most experts. You got lucky, you should be happy with that.  It still doesn't mean property is always a good investment, and that renting is a bad one which I believe is what triggered the discussion you're talking about.
  22. Bavaria and the real estate bubble

    The fact that interest rates just got lowered again (to -0.5%) doesn't help the situation either. Until they go back up again, and they relax building regulations/open up more land for development and people stop coming to Munich, the prices probably won't come down.  I just can't imagine that they'll go up any further, otherwise Munich will have the most expensive purchase prices in the entire world (even though rents are no where near close to the most expensive and are quite reasonable in comparison, another thing that makes the situation somewhat concerning), but I said this 5 years ago too, so could very well be wrong again.
  23. Why is it so hard to buy a flat in Munich?

      When you say "very good area" people think Altstadt/Schwabing.  Aschheim isn't even in Munich.  That's not to say it's a bad area, but 500k for an older 90sqm apartment there seems about right.   No one can tell you whether it will be a good investment or not.  Prices have typically gone up but there is no question that prices have never been higher and experts say that Munich is the biggest property bubble risk in Europe, which makes sense as the prices really are out of control here given the wages and the general situation of Munich, which is not some big city like London or Paris  even though whose prices are not that far off those cities.   That said, interest rates are super low and you can lock them in here for a long time, so as long as you are happy with the repayments and you intend to stay for a long while, I don't think you have too much to worry about.  If you intend to leave in a couple of years, I would definitely be wary.