Buying property in Germany

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The empirica institute, which has been bearish on German real estate since a couple years, has just divulged a study in which they expect a crash in property prices up to 25% in 2020/2021. However, they expect a full recovery afterward driven by extra demand, their reasoning being that like in 2008 the crisis will hit southern Europe disproportionately harder and industry driven Germany (which is in addition proving itself a haven in time of health crisis) will see increased immigration as a result. I agree with them.


as an aside, pos-corona buyers and renters will in my opinion give added value to stuff like gardens, large balconies and an extra room. Small-apartments in densely built areas are going to lose value harder in comparison.

 

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That's what Marie Antoinette might have said, "why don't they have large balconies?"

I am glad to see that you don't have to worry about such mundane problems but a typical new arrival in Munich is desperate to find just anything where he can sleep and keep his clothes. The unemployed you predict to come from Southern Europe will be looking for the cheapest or smallest places they can find so that sector in the market will once again see the greatest increase in demand just like after the financial crisis or after the influx of refugees.

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2 hours ago, LeChamois said:

That's what Marie Antoinette might have said, "why don't they have large balconies?"

I am glad to see that you don't have to worry about such mundane problems but a typical new arrival in Munich is desperate to find just anything where he can sleep and keep his clothes. The unemployed you predict to come from Southern Europe will be looking for the cheapest or smallest places they can find so that sector in the market will once again see the greatest increase in demand just like after the financial crisis or after the influx of refugees.


that has nothing to do with what I said, i.e what kind of property is desirable to buy has nothing to do with what newcomers in Germany can expect to find as lodging. Small apartments in the city center have increased  the most in value in the last decade with the argument that young, single professionals are too busy either working or enjoying city life to stay indoors and that suburbs are unsexy. The really needy stay wherever they can, they don’t start a new topic in this forum asking for an apartment as long as it is in Schwabing or Haidausen. And by the way, a lot of Southern Europeans that arrived because of the crisis were highly educated and landed good paying jobs. They didn’t come solely out of desperation.

 

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On 9/20/2006, 10:37:35, lexus said:

Can anybody help with the buying process in Germany? I have made an offer and it's been accepted, I am now awaiting mortgage offer from Raifeissenbank but an not sure when to pay deposit etc..

 

Thanks.

 

check this video...https://youtu.be/mA1B2DmhWWM

It explains the whole buying process in detail.

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On 13.4.2020, 15:09:20, mtbiking said:

The empirica institute, which has been bearish on German real estate since a couple years, has just divulged a study in which they expect a crash in property prices up to 25% in 2020/2021.

That is basically what I have been saying all along and have been criticized for.  Now is a bad time to buy, even if you could.  If and when the prices drop then it might be a good time.  So far they have not, which according to empirica, is because the market is frozen.  I am not so bullish on the recovery because I think people will actually leave, not start coming in waves, for all of the reasons I previously mentioned. Some other experts are predicting no drop or at least not as much.  I know of no one who is expecting an increase in value in the short term.   Either way, it would make sense to hold off right now, no? 

 

BTW, my stocks are doing great, in case anyone cares ;)

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30 minutes ago, BradinBayern said:

That is basically what I have been saying all along and have been criticized for.  Now is a bad time to buy, even if you could.  If and when the prices drop then it might be a good time.  So far they have not, which according to empirica, is because the market is frozen.  I am not so bullish on the recovery because I think people will actually leave, not start coming in waves, for all of the reasons I previously mentioned. Some other experts are predicting no drop or at least not as much.  I know of no one who is expecting an increase in value in the short term.   Either way, it would make sense to hold off right now, no? 

 

BTW, my stocks are doing great, in case anyone cares ;)


empirica expects a full recovery as early as in one year, which is not a long time - better to prepare now for those deals. The  IW institute on the other hand is bullish on property as they see the cheap money getting cheaper plus the idea of Beton gold  as the determining factor.

 

Personally, I wouldn’t buy now. I’ll wait at least two to three months to see how things develop. In the last days I’ve been checking the Zwangsversteigerungs website and the usual Immobilienportals, no sign of a crisis or price  drop yet. There’s likely some bluff involved. However, I don’t feel the need to buy, now or ever, so it’s an emotionally low stakes game for me - strictly business.

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1 hour ago, mtbiking said:


empirica expects a full recovery as early as in one year, which is not a long time - better to prepare now for those deals. The  IW institute on the other hand is bullish on property as they see the cheap money getting cheaper plus the idea of Beton gold  as the determining factor.

 

Personally, I wouldn’t buy now. I’ll wait at least two to three months to see how things develop. In the last days I’ve been checking the Zwangsversteigerungs website and the usual Immobilienportals, no sign of a crisis or price  drop yet. There’s likely some bluff involved. However, I don’t feel the need to buy, now or ever, so it’s an emotionally low stakes game for me - strictly business.

Yeah, I don't buy empirica's reasoning on the recovery.  Basically the economy will be shit, but it will be less shit here so people will come?  Will new immigrants really drive prices up if they are coming because of financial problems back home? Will they even come?  

 

During the Great Depression New York properties lost 51% of their value and real estate didn't recover until 1960.  Of course that is the US, not Germany and 1920 not now, but still it goes against the idea that real estate values always go up and that people will always seek shelter in real estate when things go bad.

 

The empirica article goes into detail about why the prices haven't changed yet, that part I agree with.  No one is selling now anyway so prices are frozen.  So, no reason to drop the price until you can reasonably expect to sell.  Once we see more sales happening, then we will know how much it is going to drop.

 

Zwangsversteigerungen takes months to develop so checking now makes no sense, you are bascially seeing what went into default months ago.  Preparing for deals? Sure, why not? Especially if you plan to live in one of them.  However, the initial question was "is this a good time to buy"? And my answer was "no, it isn't".    If we saw a massive decrease in prices like we saw with the stock market - then maybe but the question was about right now. 

 

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1 hour ago, mtbiking said:


empirica expects a full recovery as early as in one year, which is not a long time - better to prepare now for those deals. The  IW institute on the other hand is bullish on property as they see the cheap money getting cheaper plus the idea of Beton gold  as the determining factor.

 

Personally, I wouldn’t buy now. I’ll wait at least two to three months to see how things develop. In the last days I’ve been checking the Zwangsversteigerungs website and the usual Immobilienportals, no sign of a crisis or price  drop yet. There’s likely some bluff involved. However, I don’t feel the need to buy, now or ever, so it’s an emotionally low stakes game for me - strictly business.

BTW, even the IW Institute is not "bullish" - they are predicting a drop of between 0 and 12%. Worst case 17%.  More of a stagnation rather than a bull market. 

 

Even if they are right, you still would have done a lot better in the stock market had you listened to me ;)

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There are no comparisons to today's markets...none.  There is pent up demand to buy and sell in residential real estate and commercial markets are anyone's guess.  The key indicators will be job loss and bankruptcies.  You can only be furloughed for just so long, but if your company goes out of business, the furlough becomes permanent.  Countries must institute rational back-to-work schedules now. 

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30 minutes ago, BradinBayern said:

BTW, even the IW Institute is not "bullish" - they are predicting a drop of between 0 and 12%. Worst case 17%.  More of a stagnation rather than a bull market. 

 

Even if they are right, you still would have done a lot better in the stock market had you listened to me ;)


I call that bullish. It would mean in worse case the prices of 2015/2016 and a comparatively small correction when you take into account what’s going on. 
 

About the stock market: 1) you can stop pretending you were something besides lucky 2) I honestly don’t need to care.

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1 hour ago, BradinBayern said:

BTW, even the IW Institute is not "bullish" - they are predicting a drop of between 0 and 12%. Worst case 17%.  More of a stagnation rather than a bull market. 

 

Even if they are right, you still would have done a lot better in the stock market had you listened to me ;)

 

You are so full of it.

 

You realize people can borrow at less than 1%APR?

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46 minutes ago, RenegadeFurther said:

 

You are so full of it.

 

You realize people can borrow at less than 1%APR?

Wow!  Awesome!  You mean I can really borrow at less than 1% APR and then lose 12% or 25% of my investment?  What a deal!

 

You must be some sort of business GENIUS!

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20 minutes ago, BradinBayern said:

Wow!  Awesome!  You mean I can really borrow at less than 1% APR and then lose 12% or 25% of my investment?  What a deal!

 

If you chose to live there and not rent, what will you lose?

 

You must be a mathematical GENIUS!

 

Did you get taught percentages in school?

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10 minutes ago, RenegadeFurther said:

If you chose to live there and not rent, what will you lose?

 

You must be a mathematical GENIUS!

 

Did you get taught percentages in school?

What will I lose?  The awesome returns that I am now getting in the stock market which waaaay outweigh my rent 

 

That is called "opportunity costs" you learn about it in Econ 101. 

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6 minutes ago, BradinBayern said:

 

 

What will I lose?  The awesome returns that I am now getting in the stock market which waaaay outweigh my rent 

 

 

Congratulations.

 

Stocks go up as well as go down, like hmmmmm, property.

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1 hour ago, mtbiking said:


I call that bullish. It would mean in worse case the prices of 2015/2016 and a comparatively small correction when you take into account what’s going on.

bullish
/ˈbʊlɪʃ/
adjective
adjective: bullish
Stock Market
characterized by rising share prices.
"the market was bullish"
 

You see, so when the prices are going down, it cannot be "bullish"  Kinda the definition of the word.

1 hour ago, mtbiking said:

 

About the stock market: 1) you can stop pretending you were something besides lucky 2) I honestly don’t need to care.

Actually I posted in some detail my reasoning.  You can check the archives  I posted both before cashed out my mutual funds and more recently when I bought back in.  So, if you consider things working out the way I predicted as "lucky" then I guess I was lucky.  Of course luck always plays a role.  New free tip:  Chinese tech firms.  Cell phones and such.  They are back up and operating where the rest of the world has been shut down and are buying shit loads of industrial machinery.  You can thank me later.

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6 minutes ago, RenegadeFurther said:

 

Congratulations.

 

Stocks go up as well as go down, like hmmmmm, property.

Yes, genius, but my stocks are going up NOW and real estate is about to take a beating.  So why in fucks sake would you recommend anyone buy NOW when the prices are high and nearly everyone is predicting some sort of downturn or at least stagnation?  Why not wait for prices to drop?  

 

If prices on real estate go through the floor, I will sell my stock at profit and buy real estate.  Probably at your Zwangsversteigerung. 

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2 minutes ago, BradinBayern said:

Yes, genius, but my stocks are going up NOW and real estate is about to take a beating.  So why in fucks sake would you recommend anyone buy NOW when the prices are high and nearly everyone is predicting some sort of downturn or at least stagnation?  Why not wait for prices to drop?  

 

If prices on real estate go through the floor, I will sell my stock at profit and buy real estate.  Probably at your Zwangsversteigerung. 

 

So YOUR stock has gone up, so people are supposed to stop all activity and listen your financial advice.

 

What stock did you invest in?

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Just now, RenegadeFurther said:

 

So YOUR stock has gone up, so people are supposed to stop all activity and listen your financial advice.

 

What stock did you invest in?

Actually MOST stocks have gone up.  You would have had to be pretty unlucky or pretty stupid had you followed my advice and lost money. 

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Stocks/ mutual funds etc-

it is not the TIMING that counts but the TIME IN.

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