4 ms·

> That has meant a negative household saving rate, compared with Germany's 10 percent of disposable income. Isn't it because majority of Germans rent and major

> That has meant a negative household saving rate, compared with Germany's 10 percent of disposable income. Isn't it because majority of Germans rent and majority of Poles buy?

pleasecalllater 9y ago
If you compare the cost of a mortgage, and a rent, they are very similar in Poland. So after 30 years you can sell the flat/house and you will get half of that money back. It's better than nothing. Half, because usually the total mortgage cost for 30 years is about 100%.
- tcbawo 9y ago
  Is that mortage cost in real terms? If interest rates are close to appreciation rate, you might break even in real terms (apart from tax/maintenance costs).
  - pleasecalllater 9y ago
    That's what I saw in simulations for a 30 year mortgage shown by multiple banks. The amount of what I'd pay was twice the house cost. The interest rate was then around 3-4%, the appreciation rate about 2%, if I remember correctly. So generally 100% more is a lot. However after 30 years you can sell the house, and what you get is still much more than renting, when you get nothing at the end.
- galfarragem 9y ago
  In Portugal renting is more expensive then the cost of a mortgage due to tenant ultra-protective laws. Landlords are literally afraid to rent. Economically this is a disaster.
ucaetano 9y ago
> Isn't it because majority of Germans rent and majority of Poles buy? No. Economically, it doesn't make a difference. Although renting is better to society as a whole.
- baq 9y ago
  I never understood that. I keep hearing about landlords ultimately sucking all the earnings of the society that lives on the land they own (see the Bay Area for an example, where a mattress in a wardrobe costs you $1k or whatever).
  - epistasis 9y ago
    Charging rent doesn't necessarily have to be rent-seeking. The Bay Area suffers from a severe and self inflicted housing shortage, meaning that landlords and property owners are actively rent seeking by not letting housing change to match demand.
  - Analemma_ 9y ago
    It's complicated, there are pros and cons of each. The fewer landlords you have the better, but at the same time, situations like the United States-- where half the country has gigantic mortgages and relies critically on their home being an always-appreciating asset-- isn't great either. Economists have argued about this forever and there's no clear right answer.
  - ucaetano 9y ago
    > I never understood that. I keep hearing about landlords ultimately sucking all the earnings of the society that lives on the land they own When you buy a house, you're essentially becoming your own landlord. Taxes aside, it doesn't make a difference if you rent, buy a house and live in it, or buy a house, rent it out, and rent another house for yourself. The issue isn't being a landlord, but blocking the building of new housing when demand is going up so you can extract economic rents from society.
- bobthechef 9y ago
  > renting is better to society as a whole. Care to explain? I would say that widespread renting is actually quite terrible. It means that property is kept in the hands of class of landowners (and when wealth is concentrated, this also tends to concentrate power); that instead of investing one's income, renters are basically paying off the owner's mortgage; that generally, people prefer to own, and so widespread renting is a sign of being unable to participate in the real estate market; that it generally is associated with a rentier economy. So, no, I do not think renting is better. At all.
rb808 9y ago
Probably because Germans earn 3x as much. https://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage https://en.wikipedia.org/wiki/List_of_European_countries_by_...
- asdsa5325 9y ago
  Average wage doesn't matter unless you adjust for cost of living.

> That has meant a negative household saving rate, compared with Germany's 10 percent of disposable income. Isn't it because majority of Germans rent and majority of Poles buy?

pleasecalllater 9y ago

If you compare the cost of a mortgage, and a rent, they are very similar in Poland. So after 30 years you can sell the flat/house and you will get half of that money back. It's better than nothing. Half, because usually the total mortgage cost for 30 years is about 100%.

tcbawo 9y ago
Is that mortage cost in real terms? If interest rates are close to appreciation rate, you might break even in real terms (apart from tax/maintenance costs).
- pleasecalllater 9y ago
  That's what I saw in simulations for a 30 year mortgage shown by multiple banks. The amount of what I'd pay was twice the house cost. The interest rate was then around 3-4%, the appreciation rate about 2%, if I remember correctly. So generally 100% more is a lot. However after 30 years you can sell the house, and what you get is still much more than renting, when you get nothing at the end.
galfarragem 9y ago
In Portugal renting is more expensive then the cost of a mortgage due to tenant ultra-protective laws. Landlords are literally afraid to rent. Economically this is a disaster.

ucaetano 9y ago

> Isn't it because majority of Germans rent and majority of Poles buy? No. Economically, it doesn't make a difference. Although renting is better to society as a whole.

baq 9y ago
I never understood that. I keep hearing about landlords ultimately sucking all the earnings of the society that lives on the land they own (see the Bay Area for an example, where a mattress in a wardrobe costs you $1k or whatever).
- epistasis 9y ago
  Charging rent doesn't necessarily have to be rent-seeking. The Bay Area suffers from a severe and self inflicted housing shortage, meaning that landlords and property owners are actively rent seeking by not letting housing change to match demand.
- Analemma_ 9y ago
  It's complicated, there are pros and cons of each. The fewer landlords you have the better, but at the same time, situations like the United States-- where half the country has gigantic mortgages and relies critically on their home being an always-appreciating asset-- isn't great either. Economists have argued about this forever and there's no clear right answer.
- ucaetano 9y ago
  > I never understood that. I keep hearing about landlords ultimately sucking all the earnings of the society that lives on the land they own When you buy a house, you're essentially becoming your own landlord. Taxes aside, it doesn't make a difference if you rent, buy a house and live in it, or buy a house, rent it out, and rent another house for yourself. The issue isn't being a landlord, but blocking the building of new housing when demand is going up so you can extract economic rents from society.
bobthechef 9y ago
> renting is better to society as a whole. Care to explain? I would say that widespread renting is actually quite terrible. It means that property is kept in the hands of class of landowners (and when wealth is concentrated, this also tends to concentrate power); that instead of investing one's income, renters are basically paying off the owner's mortgage; that generally, people prefer to own, and so widespread renting is a sign of being unable to participate in the real estate market; that it generally is associated with a rentier economy. So, no, I do not think renting is better. At all.

rb808 9y ago

Probably because Germans earn 3x as much. https://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage https://en.wikipedia.org/wiki/List_of_European_countries_by_...

asdsa5325 9y ago
Average wage doesn't matter unless you adjust for cost of living.