German bureaucracy is so bad now that most construction of new homes has completely stopped.
In an era where we need unprecedented levels of new housing going on the market each year, we are parked on the side of the road with a seized up engine.
How the collective infrastructure and urban development officials sleep at night is beyond me. I would wake up in cold sweats every night at the absolute catastrophe that is unfolding in front of our eyes. There is a housing crisis and absolutely no one is doing anything about it.
Why don’t they make houses/apartment blocks from glass?
For those of us living in regions with nice weather, we probably need to take a page out of our american friends’ books and start building houses out of wood
It’s kinda crazy that the housing crisis is in full swing and basically every government is just sitting around doing nothing about it…anyone know why?
For me it’s seems like a combination of factors
Not in any order but I see it like this:
1: After the housing crash of 2008, nearly all countries affected by the crash have slowed significantly in construction and have not returned anywhere near close to the construction boom years before 2008.
2: Immigration and refugees….Germany has over 2 million alone…thats insane…and although a majority do end up working….with so many coming to Europe construction should have increased but it didn’t.
3: Covid-19/cost of materials/ Inflation
This is more new and fresh but I think this is gonna cost us a few more years yet.
Covid put us at a standstill but also affected industries differently. Hospitality nosedived, tech rose up, ecommerce sky rocketed, supply chains broke, 40ft container shipping went from 2-3k to 10k….price of materials started going up, Things started to come back as we opened up but it took a little time. Then in the last year for some reason I don’t fully understand yet….inflation jumped cause we flipped the switch finally and people started buying again rapidly? Definitely seems like price gouging also made inflation worse because container shipping has gone back down to pre-covid levels.
That title is giving me anxiety.
Isn’t there always a housing crisis? I’ve literally never heard of a housing boom.
They key point for me and what is worth a discussion seems to be this paragraph:
>The struggles to build enough affordable homes ultimately stems from poor government policy. Housing falls somewhere between a market-driven asset and a regulated public good. That combination bogs down investment while subjecting the sector to volatility, and the current upheaval in financing and construction costs often makes building unprofitable, except for luxury homes.
I can only speak for Germany and I may get downvoted on this.
We are building more property. Germans population only increased slowly the last 20 years and yet quite a number of new buildings, houses, apartments have been created. Relatively speaking more than the population increased. But the main problem IMHO is:
Extremely strong renters’ rights!
If you own property and someone moves in paying rent, it’s extremely hard to increase the rent and also extremely hard to terminate the contract and have someone else move in instead (with higher rent). This results in scenarios where old people have large apartments in major cities and pay very cheap rents (5€/sqm) per month while young people looking for a new place in Munich pay up to 20€/sqm for a new contract. That means old people remain with their old contracts and very large properties even when children move out and/or the partner dies. Moving to a smaller place would mean new contract and today’s market prices.
This creates two isolated real estate markets: (1) older renters with cheap rent who will never move away and free up space and (2) younger poor generations fighting for anything new opening up at extremely overpriced prices.
My personal solution would be to remove a lot of renters’ protections and liberate the market allowing for more fluctuation and more liquidity.
Unfortunately, social and green parties will not allow this and will just keep yelling for more and more housing even when construction costs are high, interest rates through the roof, and German bureaucracy insane as ever.
Here’s an idea. How about not importing so many people? Just allow enough in that the supply of new housing is able to keep up with the new demand.
I am glad I could buy an apartment this year.
What will come will be a nightmare.
10 comments
German bureaucracy is so bad now that most construction of new homes has completely stopped.
In an era where we need unprecedented levels of new housing going on the market each year, we are parked on the side of the road with a seized up engine.
How the collective infrastructure and urban development officials sleep at night is beyond me. I would wake up in cold sweats every night at the absolute catastrophe that is unfolding in front of our eyes. There is a housing crisis and absolutely no one is doing anything about it.
Why don’t they make houses/apartment blocks from glass?
For those of us living in regions with nice weather, we probably need to take a page out of our american friends’ books and start building houses out of wood
It’s kinda crazy that the housing crisis is in full swing and basically every government is just sitting around doing nothing about it…anyone know why?
For me it’s seems like a combination of factors
Not in any order but I see it like this:
1: After the housing crash of 2008, nearly all countries affected by the crash have slowed significantly in construction and have not returned anywhere near close to the construction boom years before 2008.
2: Immigration and refugees….Germany has over 2 million alone…thats insane…and although a majority do end up working….with so many coming to Europe construction should have increased but it didn’t.
3: Covid-19/cost of materials/ Inflation
This is more new and fresh but I think this is gonna cost us a few more years yet.
Covid put us at a standstill but also affected industries differently. Hospitality nosedived, tech rose up, ecommerce sky rocketed, supply chains broke, 40ft container shipping went from 2-3k to 10k….price of materials started going up, Things started to come back as we opened up but it took a little time. Then in the last year for some reason I don’t fully understand yet….inflation jumped cause we flipped the switch finally and people started buying again rapidly? Definitely seems like price gouging also made inflation worse because container shipping has gone back down to pre-covid levels.
That title is giving me anxiety.
Isn’t there always a housing crisis? I’ve literally never heard of a housing boom.
They key point for me and what is worth a discussion seems to be this paragraph:
>The struggles to build enough affordable homes ultimately stems from poor government policy. Housing falls somewhere between a market-driven asset and a regulated public good. That combination bogs down investment while subjecting the sector to volatility, and the current upheaval in financing and construction costs often makes building unprofitable, except for luxury homes.
I can only speak for Germany and I may get downvoted on this.
We are building more property. Germans population only increased slowly the last 20 years and yet quite a number of new buildings, houses, apartments have been created. Relatively speaking more than the population increased. But the main problem IMHO is:
Extremely strong renters’ rights!
If you own property and someone moves in paying rent, it’s extremely hard to increase the rent and also extremely hard to terminate the contract and have someone else move in instead (with higher rent). This results in scenarios where old people have large apartments in major cities and pay very cheap rents (5€/sqm) per month while young people looking for a new place in Munich pay up to 20€/sqm for a new contract. That means old people remain with their old contracts and very large properties even when children move out and/or the partner dies. Moving to a smaller place would mean new contract and today’s market prices.
This creates two isolated real estate markets: (1) older renters with cheap rent who will never move away and free up space and (2) younger poor generations fighting for anything new opening up at extremely overpriced prices.
My personal solution would be to remove a lot of renters’ protections and liberate the market allowing for more fluctuation and more liquidity.
Unfortunately, social and green parties will not allow this and will just keep yelling for more and more housing even when construction costs are high, interest rates through the roof, and German bureaucracy insane as ever.
Here’s an idea. How about not importing so many people? Just allow enough in that the supply of new housing is able to keep up with the new demand.
I am glad I could buy an apartment this year.
What will come will be a nightmare.