Bavaria and the real estate bubble

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Does anyone think the Corona virus will affect the housing market? I have the feeling that the market will remain strong, because nobody is moving anywhere. It might be that the market stagnates for a while, but will pick up again as soon as it is safe. I think the prices will stay the same. 

 

Thoughts?

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well - just my personal opinion....

 

people (including myself) have to live somewhere - Corona or not.

 

So, housing is like food and water - everybody needs it. Prices may fluctuate up and down, supply/demand will fluctuate up and down, but in the long run the housing market is absolutely going to be your safest bet.

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20 minutes ago, karin_brenig said:

well - just my personal opinion...

 

people (including myself) have to live somewhere - Corona or not.

 

So, housing is like food and water - everybody needs it. Prices may fluctuate up and down, supply/demand will fluctuate up and down, but in the long run the housing market is absolutely going to be your safest bet.

Yes I know it is the best investment, but with houses costing between €800k and €1M, the prices have long since past up what is possible for us. I wish it was like the US, where at least there are houses of varying price range. Here you pay €800k for a new townhouse, or €700k for a used 40 year old townhouse, that needs renovating. No matter what, you are paying at least €800k. As an engineer and occupational therapist, we cannot afford it. That is why we have a slight glimmer of hope that the prices might trend downwards, but I wouldn't bet on it.

20 minutes ago, karin_brenig said:

 

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I think my landlord is shit scared that I leave. Always asking me if my job is going well and if we are all healthy...

There will be at least a short term effect. People are scared. Or they lost their sources of income, so they might be tempted to sell/rent cheap.

Airbnb renting downturn will of course increase rent offering for short/mid term.

 

IMO Corona is a temporary situation that will not change much things on the long run. At the same time, I think there is a housing bubble about to burst, corona or not.

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1 hour ago, dmbartender said:

Yes I know it is the best investment, but with houses costing between €800k and €1M, the prices have long since past up what is possible for us. I wish it was like the US, where at least there are houses of varying price range. Here you pay €800k for a new townhouse, or €700k for a used 40 year old townhouse, that needs renovating. No matter what, you are paying at least €800k. As an engineer and occupational therapist, we cannot afford it. That is why we have a slight glimmer of hope that the prices might trend downwards, but I wouldn't bet on it.

 

even that - expensive real estate, especially in Bavaria - wouldn't deter me right now (we are in the process of buying a nice Doppelhaushälfte mit Einliegerwohnung right around that price range currently).
Take the amount that you are paying now for rent, and start looking for something that you could get financed within that range for an estimated monthly payment.

 

That may not be a house right away, you may have to start with an Eigentumswohnung somewhere - but you would stop throwing your money away every month, giving it to the landlord.

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I would argue that Berlin investments would work out better than Munich. 

Because of huge rush to online - digital there will be increased demand. 

 

I invested in DWNI stock (which owns lot of Berlin properties) at 38. It went down to 28 because of Corona. 

Now, back up at 37. 

 

Barring short term fluctuations, Berlin seems more reasonably priced. Plus, with all the money printing that central banks are doing - real estate or gold might work out well in next 10 years. Welcome inflation.

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1 hour ago, MikeMelga said:

I think my landlord is shit scared that I leave. Always asking me if my job is going well and if we are all healthy...

There will be at least a short term effect. People are scared. Or they lost their sources of income, so they might be tempted to sell/rent cheap.

Airbnb renting downturn will of course increase rent offering for short/mid term.

 

IMO Corona is a temporary situation that will not change much things on the long run. At the same time, I think there is a housing bubble about to burst, corona or not.

 

Maybe he's honestly concerned? I guess it depends how often he asked. More than once or twice does show panic. I did ask my tenants if everything is OK, and I didn't do it out of being scared - I could perfectly stomach a few months with reduced or without rental income if they were in real trouble. 

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3 hours ago, karin_brenig said:

even that - expensive real estate, especially in Bavaria - wouldn't deter me right now (we are in the process of buying a nice Doppelhaushälfte mit Einliegerwohnung right around that price range currently).
Take the amount that you are paying now for rent, and start looking for something that you could get financed within that range for an estimated monthly payment.

 

That may not be a house right away, you may have to start with an Eigentumswohnung somewhere - but you would stop throwing your money away every month, giving it to the landlord.

Hey Karin,

 

Well, I mean there is a huge disparity in the price of renting vs owning. We currently rent for €1.400, and if we would buy something for 800k, then our monthly rate would be €3k. That would be impossible, since it would take up over 80% of my salary. We also need to buy groceries, food, and supplies.

 

The best I could do is maybe a 2 br apartment for 450k, but we have two kids, and that would be cramped. Plus, they wouldn't have a yard. Social distancing and staying at home is not great, but way better with a yard. We probably would have gone bonkers by know if we'd been sitting cramped in an apartment the last 6 weeks.

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1 hour ago, dmbartender said:

Hey Karin,

 

Well, I mean there is a huge disparity in the price of renting vs owning. We currently rent for €1.400, and if we would buy something for 800k, then our monthly rate would be €3k. That would be impossible, since it would take up over 80% of my salary. We also need to buy groceries, food, and supplies.

 

The best I could do is maybe a 2 br apartment for 450k, but we have two kids, and that would be cramped. Plus, they wouldn't have a yard. Social distancing and staying at home is not great, but way better with a yard. We probably would have gone bonkers by know if we'd been sitting cramped in an apartment the last 6 weeks.

 

You shouldn't buy a home without enough capital to either lower the amount of the loan or offer as collateral and the more the better. That said, with good conditions you can now finance 800k for 20 years fixed interest at around 1% rate, which means that with 2.5% tilgung you'd be paying €2370/ month, of which €700 is interest in month one.  For comparison, I was paying more interest than that for my €180,000 loan when I first bought in Munich.  A major burden is the circa €70,000 in fees.. That's money thrown away.

 

Nearing/above forty and with children is in most cases too late to get into real estate IMHO. By that stage people may as well be content with renting and possibly buy a small condo for their retirement if so desired.

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1 hour ago, dmbartender said:

Hey Karin,

 

Well, I mean there is a huge disparity in the price of renting vs owning. We currently rent for €1.400, and if we would buy something for 800k, then our monthly rate would be €3k. That would be impossible, since it would take up over 80% of my salary. We also need to buy groceries, food, and supplies.

 

The best I could do is maybe a 2 br apartment for 450k, but we have two kids, and that would be cramped. Plus, they wouldn't have a yard. Social distancing and staying at home is not great, but way better with a yard. We probably would have gone bonkers by know if we'd been sitting cramped in an apartment the last 6 weeks.

 

check again - now that I know you have 1.400,- € monthly, and you want a yard for your kids to play, I checked in more detail... I believe this one (just an example) would be something you could afford to buy - considering the current really low interest rates:

 

https://www.immobilienscout24.de/expose/117085629

 

there's more, of course - do your own research.

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3 hours ago, mtbiking said:

 

Maybe he's honestly concerned? I guess it depends how often he asked. More than once or twice does show panic. I did ask my tenants if everything is OK, and I didn't do it out of being scared - I could perfectly stomach a few months with reduced or without rental income if they were in real trouble. 

3 or 4 times. I think I managed to calm him down, I´m actually investing a bit in the house soon.

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16 minutes ago, MikeMelga said:

I´m actually investing a bit in the house soon.

So you will own part of the house and your landlord will own part of the house?

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1 hour ago, karin_brenig said:

 

check again - now that I know you have 1.400,- € monthly, and you want a yard for your kids to play, I checked in more detail... I believe this one (just an example) would be something you could afford to buy - considering the current really low interest rates:

 

https://www.immobilienscout24.de/expose/117085629

 

there's more, of course - do your own research.

 

That place is rented, not a good buy specially if you want to move in yourself. Besides, it's very far away from Rosenheim.

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6 hours ago, RenegadeFurther said:

So you will own part of the house and your landlord will own part of the house?

Sorry, what I meant is that I am paying for some new equipment for the house and over time it becomes his, but if I leave before 12 years, he has to pay me the difference.

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15 hours ago, karin_brenig said:

 

check again - now that I know you have 1.400,- € monthly, and you want a yard for your kids to play, I checked in more detail... I believe this one (just an example) would be something you could afford to buy - considering the current really low interest rates:

 

https://www.immobilienscout24.de/expose/117085629

 

there's more, of course - do your own research.

I think there is a reason why it´s so cheap, which is:

Quote
Bezugsfrei ab
vermietet

 

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15 hours ago, mtbiking said:

 

That place is rented, not a good buy specially if you want to move in yourself. Besides, it's very far away from Rosenheim.

ok - you want Rosenheim, and you want ready to move in - there's this then:

https://www.immobilienscout24.de/expose/117552140

 

All I am saying is, that those who search, will find.

 

You still have to do your own research. I'm just trying to give you an idea, what direction you could take for your research.

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2 hours ago, karin_brenig said:

that those who search, will find.

 

Of course they will. But after a huge struggle.

BTW, the expose you linked shows a tree (!!) and a floorplan. Not even a single pic of the house. The house is probably a disaster. My guess.

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1 hour ago, Gambatte said:

 

Of course they will. But after a huge struggle.

BTW, the expose you linked shows a tree (!!) and a floorplan. Not even a single pic of the house. The house is probably a disaster. My guess.

 

of course, your mileage will vary :) that's the fun part of life.

 

I don't consider finding a suitable house a "huge struggle" - to me it is "treasure hunt".

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Good for you. I bought 3 houses, and I rent many. House #1 took us ca 50 viewing. House #2 took us ca 150 viewings. House #3 took us 2yr. Every time was a very huge painful struggle. 

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2 hours ago, Gambatte said:

Good for you. I bought 3 houses, and I rent many. House #1 took us ca 50 viewing. House #2 took us ca 150 viewings. House #3 took us 2yr. Every time was a very huge painful struggle. 

 wow - sorry to hear that.

 

Maybe I just got lucky so far?

 

I love looking at places, meeting people, discussing my goals/prerequisites with family... securing financing... and waiting for that "heureka"-moment that always comes when you see "the one". My current house buying project is no exception, even though my situation has changed a lot from when I bought my first condo, back in 1985.

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