Sign in to follow this  
Followers 0

Comparison of property prices: Germany vs. UK

14 posts in this topic

hi there

 

would you say that it's more expensive to buy property here, in germany, than it is in the uk? or does it depend on the area? i know that the centre of london is unattainable for most, but what about the rest of the uk in comparison to here?

0

Share this post


Link to post
Share on other sites

It's an invalid comparison - I know villages in the Lakes where you can buy two bedroom property for under 20k GBP - having said that a house near me of similar size would be around 160k GBP. And in central London? 400k perhaps? God alone knows really, but I don't think property prices stand comparison like this..

0

Share this post


Link to post
Share on other sites

hmmm... if you can't compare house prices, how would you explain why renting is the norm here and not in the uk?

0

Share this post


Link to post
Share on other sites

If You take London Vs Munich, which is difficult to do since people earn between 20-50% more in London plus add in the banking factor (loads of wealthy bankers)

 

Property prices in Munich tend to vary between 3000 – 4000 Euro per m² for the better areas

Property prices in London are probably around 2-3 times this.

0

Share this post


Link to post
Share on other sites

Outside of the S-Bahn region ellewood, property is reasonable enough. I'm living in Wasserburg now and we have seen some very affordable stuff. For example:

 

140qm 4 Zimmer Wohnung

Tiefgarage

2 x Kellerzimmer

100qm Dachterasse (yes 100qm)

 

for €240K. Thinking of investing.

0

Share this post


Link to post
Share on other sites

 

hmmm... if you can't compare house prices, how would you explain why renting is the norm here and not in the uk?

I was led to believe it was down to historical reasons really - when we made the shift to become home owners rather than renters, the Germans simply did not - remember Germany suffered more from economic crises last century than the UK, and so home ownership was presumably not possible...

 

Is that anywhere near right? Someone must know???

0

Share this post


Link to post
Share on other sites

or maybe it's down to the fact that the banks don't give out such generous mortgage deals here?

0

Share this post


Link to post
Share on other sites

Yeah I think that's part of it. 3 factors IMO:

- You generally save until you have 10-20%

- Quite old leaving university

- Cultural (just isn't a culture of buying)

 

My gf is just out of her probation period, i.e. now has a full salary and thus in a position to think about buying and she is 29. Add a couple of years saving to that and you are talking 32ish. I know quite a few here around that age thinking of buying.

0

Share this post


Link to post
Share on other sites

From what I understand you are close on the historical issue Jimbo. I remember my German uncle-in-law buying a house to rent out here about 5 years ago.

 

I was rather surprised when I worked out that the rental return was something like 2.5%...although he explained that at the end of WW2 when the country went bankrupt if you had cash in the bank - however much - you got something like 100DMKS each in your bank account. But of course if you owned property then you still owned it!

 

So the lesson was that you were better to have property than cash in the bank, which is why landlords are still happy to rent properties out at what you and I would consider to be uneconomic rates. Not that we see a bankrupt germany coming but sentiment lasts a long time.

 

Now it sounds like there is a slight contradiction here that such a high percentage of people are therefore happy to rent (rather than buy), although there is a big difference between investing spare "cash" into property, and investing a "mortgage" into property like we do in the UK.

 

Still seems to be quite a lot of cheap land in the sticks where I live and everybody wants to build new, and this keeps the 2nd hand stuff down in price.

 

But in answer to the original question - I reckon EVERYTHING is cheaper out here, and bear in mind I am still a 6 month newbie (except perhaps golf!).

0

Share this post


Link to post
Share on other sites

Just a few additional reasons:

  • Traditionally, Germans don't move around a lot. Lifelong home, lifelong job. House purchase is/was a family thing - Grandparents buy a big property, move into the the Granny flat upstairs when their son (or daughter) and family is ready to take over the main accommodation. Following Grandparents demise each generation moves up a floor, and so forth...
  • Property (well, land really) in the Munich area especially is damned expensive (combined with the fac that building quality and therefore cost is high)
  • In the last hundred years Germany have seen some pretty dramatic financial, political and swings - people have lost a lot of money in the past... Germans don't like risk
  • Unlike UK (as an example) there has been less investment potential in the German property - in the last 10 years local property values have barely risen more than 10%
  • Poor investment potential (above) along with high initial costs (Real Estate Agents costs, land tax, Lawyer and Notary costs) mean that purchasing a house, must be at least a 10-year minimum investment.
  • Although it's less as relevant as it used to be, in the past the German government has encouraged property investment to rent onwards, rather than owner-occupation. There used to be major tax breaks to buy to rent out, rather than buy to live in, especially in Berlin and ex-eastern Germany. For example, when buying certain properties in many areas a new owner could avoid paying the 16% VAT so long as they rented out for at least 10 years...

YL6

0

Share this post


Link to post
Share on other sites

 

- Cultural (just isn't a culture of buying)

...plus there is a big culture of buying in the UK- perhaps fuelled with the idea that property prices only ever go up and that cheap credit is always a good thing- much more so than many other countries.

 

In the UK now there are companies which will lend you 125% of the value of the property, another which will give you a "free" car, and another which will lend you up to 85% of the value of any house you want to buy with "no questions asked" about your income or how you intend to pay the loan back.

 

Madness!

1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0