[camgunz]

Like others in this thread I'm not an expert, but it seems to me that the thing every cyclical housing market has in common is a heavily subsidized/credited/backed mortgage market. I think the counterexample is Germany? They build a good amount of housing every year, they watch housing prices very carefully and pull some levers if they tick up or turn down, and they don't store a huge amount of their population's wealth in their homes.

Anything else wildly perverts monetary policies. The mortgage market is suddenly the real bond market, there's extreme moral hazard, there are either explicit mortgage market safety nets or quasi-nationalized mortgage providers, etc. It becomes a weird monetary policy slush fund that is incidentally also where people live.

[qwytw]

Germany also has a much more decentralized economy and more spread out population compared to other European countries. There is no city equivalent to London, Paris or Dublin.

For example Berlin's population only started growing in the 2010's (it's was stable or declining since the 1990's) and prices have been growing quite rapidly lately so arguably it just a few years (or decades) behind other major European cities. Munich on the other hand is almost as expensive as Paris.

[inglor_cz]

Munich is crazy. You would have to be a very upper middle class to afford children and a house there. Unless you inherited one, of course.

[camgunz]

Cities are hard because it's kind of a function of services and space constraints. If there's only so many square meters within 15 minutes of public transit, for example, that's gonna spike prices--as long as public transit is desired. You can look at Los Angeles for a different set of rules--super sprawl, heavy prevalence of cars and traffic, various environmental/cultural concerns, etc. City planners know all this and the zeitgeist now is the 15 minute city (or whatever number of minutes) to try and reduce these inefficiencies of scale and become less car-obsessed.

But all that aside, I'm not really talking about housing prices. I'm talking about the boom and bust cycles.

[oblio]

House or an apartment?

[inglor_cz]

A house. Let us say 160 sqm with 800 sqm garden. You can buy such property very cheaply somewhere in rural Thüringen, but for Munich, you would have to be a millionaire or close to that status.

[oblio]

You don't <<need>> a 160sqm house with a 800sqm garden to raise kids :-)))

You <<want>> that house, notice the difference?

I grew up in a very practically designed 2 bed room apartment of about 90sqm. It was more than adequate and to preempt comments, it wasn't "inhumane" or a "slum" or whatever. I'd live there today if Romania as a whole wouldn't have a lot of growing up to do.

A 100sqm apartment, made larger to account for modern sensibilities, is more than enough to raise 2 kids.

[inglor_cz]

The "need" level is very basic, in principle you need just some water and any food and any shelter and people lived like that for millions of years.

Even a Romanian block of flats from the Ceausescu period would seem a luxury to the peasants of Vlad the Impaler.

But we are talking about Germany, Munich. This is one of the most advanced economies in the world, and a great power of export. Having a 160sqm house with a 800sqm garden shouldn't be out of reach of a regular engineer working there. Plenty of people were able to buy similar properties just 30-40 years ago, in Munich, Prague or Copenhagen. Something is seriously askew if a normal middle class in a rich country can no longer do that.

[choeger]

I think the biggest difference between Germany and Anglo-Saxon markets is that houses here aren't a commodity. People rarely move out of and sell houses. Most owners buy once in their lifetime. Consequently, houses sold are quite old on average and often not worth much.

[oblio]

Germans rent a lot. They have the highest rate of rentals in the EU, I'm not sure how this compares to the US. I'd guess Germans rent more than Americans.

[nradov]

Your guess is correct. The American homeownership rate is 65%.

https://fred.stlouisfed.org/series/RHORUSQ156N

[camgunz]

Maybe this is because you're not missing out on a housing market rocket by renting? With a reasonable tenant's rights framework, I think the benefits of home ownership are mostly aesthetic. That's not to diminish the aesthetic value, but I think a lot of people have this hierarchy where renting is below owning, and my guess is that's almost entirely to do with building equity in a home. You can imagine a alternate conception where home ownership is seen as more of a labor-intensive DIY project (which it totally is) and thus cheaper than renting, so only people who are into house DIY stuff would get one. Everyone else gets the equivalent of Gmail for homes. To be clear, I think this is currently the case, we just don't conceive of it in this way, either culturally or financially.

[oblio]

It's not just aesthetic, it's practical, too. You can make larger changes that landlords frequently ban.

[camgunz]

I mean aesthetic in the broader sense. For example I'd love to have rainwater capture and solar panels at my home, and maybe a composting site and garden too. Apartment living rules those out, but if I owned my own home I can probably get them going (coop boards or HOAs notwithstanding).

But like, I don't need them. Almost no one does. It's an aesthetic lifestyle choice. I'm (probably, anyway) willing to purchase a home in order to do this--and other non-apartment-friendly things--but I don't think it should be the goal of national housing policy to ensure that everyone has this option.

I can also imagine a more sophisticated tenant/landlord/housing policy that allowed tenants to do more significant things to land or structure. It's not like these things are unprecedented: leasers of agricultural land and commercial office space do it all the time. But again, I think it probably boils down to "poor, unsophisticated people rent, letting them lease your property is a huge risk, here's a thick contract and some biased tenant/landlord statues to protect landlord interests" thinking, which is definitely inaccurate.

[pandaman]

It all boils down to the liability. A standard residential lease only has the deposit as the collateral for any possible damage. Theoretically the landlord can go after more money with a judgment but it's not very probable to collect from an individual without much property (thus renting and not owning).

For rich and sophisticated renters there is always an option to pay the landlord to do whatever modifications they want.