5 ms·

Don’t kid, most people aren’t renting because they prefer it. We shouldn’t glorify unaffordability. My “rich” coworkers would largely love to own but they can’t

by jquery 9y ago

Don’t kid, most people aren’t renting because they prefer it. We shouldn’t glorify unaffordability. My “rich” coworkers would largely love to own but they can’t afford the mammoth down payments, and the sky high rents plus sky high taxes make it difficult to save. “One of Aesop's best-known fables is “The Fox and the Grapes.” On its surface, or its literal level of meaning, the story tells of a fox who wants a bunch of grapes hanging above his head. The fox tries desperately to reach the grapes but cannot. He finally gives up, saying that the grapes are probably sour anyway.“ https://en.m.wikipedia.org/wiki/The_Fox_and_the_Grapes https://en.m.wikipedia.org/wiki/The_Fox_and_the_Grapes

noobermin 9y ago
To your anecdote, I raise mine. At this stage in my life, I don't want to own a home for most of the reasons in the article they've listed.
yardie 9y ago
I would say it depends. Some places RE is so hot while rental vacancies are high that it makes sense to rent. The days of flipping houses to gain 20-50% profit are long gone. A lot of property in our area is being bought by foreign investors. I feel, unless they hold for 10-15 years they will never make their money back. From experience, we’re closing on a house now and not paying much more than the previous owner 10 years ago. 5 years ago we could have probably could have bought for 50% lower.
jfaucett 9y ago
> Don’t kid, most people aren’t renting because they prefer it. I can't speak for the USA but in Germany - specifically where we live, home ownership is not/barely worth it financially speaking. The taxes alone for "owning property" i.e. renting it from the government until you die are extremely high. You pay 6.5% (varies by state) of the property value in "Grunderwerbsteuer" when you initially buy and then for a home valued at around 250k (fairly normal prices) you're looking at a 2-4k per year in taxes. Throw on top of that all your upkeep costs in time and money and it really doesn't look like such a nice deal. That's why we haven't bought and I don't want to. Nowadays, "home ownership" is just another name for renting where the costs are slightly less and the upkeep to you in time and effort is more.
- joe_the_user 9y ago
  Let me rephrase it, People in the US aren't paying outrageous rent for tiny spaces because they think it's a great way to live.
- johntiger1 9y ago
  I saw an article recently about how an American immigrant was purchasing a home in Germany and was actually forced to pay LESS by the housing authority! Despite German economic strength, house prices are not outrageous. Whatever Germany is doing, they are doing right
- gerdesj 9y ago
  I used to be a British Army brat in (West) DE ('70s-80's) and my received wisdom was that Germans would generally rent and save up for ownership of a property out of town for retirement. Whereas us Brits would aspire to home ownership earlier. All of that is obviously bollocks, sort of. As another ahem European, I'm more interested in a German's views on home ownership and why I'm commenting here. You said: "That's why we haven't bought and I don't want to." implying it is all about tax. I'd be intrigued to explore this farther. You mentioned earlier "The taxes alone for "owning property" i.e. renting it from the government until you die are extremely high" - could you clarify that.
- barrkel 9y ago
  Property taxes as a brake on house prices make sense, and since we all need to pay taxes, they can be revenue neutral should the government structure them that way. The way it seems to work in the Anglosphere is that house prices are mainly limited by the cost of money. When interest rates are low, long mortgages for enormous sums are affordable so people bid up the cost of desireable places to live. But it's a zero-sum game - increased property prices don't create more land in the desireable area, and due to planning laws and nimbyism they usually don't increase density much either. Everybody works harder and pays more for approximately the same distribution of physical assets - except for the windfall for people who got in early, who turn into a political support base for parties that then need to keep house prices propped up. And the cycle needs to continue, otherwise those mortgages would have negative equity.
- 9y ago

by jquery 9y ago

noobermin 9y ago

To your anecdote, I raise mine. At this stage in my life, I don't want to own a home for most of the reasons in the article they've listed.

yardie 9y ago

I would say it depends. Some places RE is so hot while rental vacancies are high that it makes sense to rent. The days of flipping houses to gain 20-50% profit are long gone. A lot of property in our area is being bought by foreign investors. I feel, unless they hold for 10-15 years they will never make their money back. From experience, we’re closing on a house now and not paying much more than the previous owner 10 years ago. 5 years ago we could have probably could have bought for 50% lower.

jfaucett 9y ago

> Don’t kid, most people aren’t renting because they prefer it. I can't speak for the USA but in Germany - specifically where we live, home ownership is not/barely worth it financially speaking. The taxes alone for "owning property" i.e. renting it from the government until you die are extremely high. You pay 6.5% (varies by state) of the property value in "Grunderwerbsteuer" when you initially buy and then for a home valued at around 250k (fairly normal prices) you're looking at a 2-4k per year in taxes. Throw on top of that all your upkeep costs in time and money and it really doesn't look like such a nice deal. That's why we haven't bought and I don't want to. Nowadays, "home ownership" is just another name for renting where the costs are slightly less and the upkeep to you in time and effort is more.

joe_the_user 9y ago
Let me rephrase it, People in the US aren't paying outrageous rent for tiny spaces because they think it's a great way to live.
johntiger1 9y ago
I saw an article recently about how an American immigrant was purchasing a home in Germany and was actually forced to pay LESS by the housing authority! Despite German economic strength, house prices are not outrageous. Whatever Germany is doing, they are doing right
gerdesj 9y ago
I used to be a British Army brat in (West) DE ('70s-80's) and my received wisdom was that Germans would generally rent and save up for ownership of a property out of town for retirement. Whereas us Brits would aspire to home ownership earlier. All of that is obviously bollocks, sort of. As another ahem European, I'm more interested in a German's views on home ownership and why I'm commenting here. You said: "That's why we haven't bought and I don't want to." implying it is all about tax. I'd be intrigued to explore this farther. You mentioned earlier "The taxes alone for "owning property" i.e. renting it from the government until you die are extremely high" - could you clarify that.
barrkel 9y ago
Property taxes as a brake on house prices make sense, and since we all need to pay taxes, they can be revenue neutral should the government structure them that way. The way it seems to work in the Anglosphere is that house prices are mainly limited by the cost of money. When interest rates are low, long mortgages for enormous sums are affordable so people bid up the cost of desireable places to live. But it's a zero-sum game - increased property prices don't create more land in the desireable area, and due to planning laws and nimbyism they usually don't increase density much either. Everybody works harder and pays more for approximately the same distribution of physical assets - except for the windfall for people who got in early, who turn into a political support base for parties that then need to keep house prices propped up. And the cycle needs to continue, otherwise those mortgages would have negative equity.
9y ago