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Berlin now home to soaring rents and rising tensions
- collyw 9y agoIsn't this happening to everywhere where jobs are? Barcelona rents are soaring but the salaries aren't going up much.
- brad0 9y agoI’d say anywhere where the interest rates are low for an extended period of time and there’s stable work. That combo seems to blow up house prices and rents.
- closeparen 9y agoUsually when we're talking about housing affordability, it's not just a shift from interest to principal. It's the total (principal + interest) cost skyrocketing. Higher interest rates might depress prices for cash buyers, but it seems doubtful that normal people getting mortgages would be any better off.
- StudentStuff 9y agoHousing supply also plays into it. We know how to build lots of cheap housing, but instead we create restrictions to ensure it is never built, then wonder why there is a housing crisis.
- chrischen 9y agoPeople restricting houses already have housing. Seems these days a lot of soecial interests against density.
- StudentStuff 9y agoIt is a strong culture of "I've got mine, you can pound sand/die on the street" here in the US. Its quite interesting how most people subscribe to religions that tell them to help and care for their neighbors, community, and those who have fallen on hard times, yet in their own daily lives they actively work to bootstomp the poor. Those beliefs and actions do not reconcile :P
- khhh35575544 9y agoSometimes profound beliefs enable bad behaviour.
- majewsky 9y agoThat's because the major belief system in the west is not Christianity, it's actually neoliberalism: Everyone is responsible for their own fortune. So if someone is unfortunate, it must be their own fault and they deserve it. People may call upon their Christian values, but what they actually do is pretty neoliberal.
- chrischen 9y agoI remember there are Mexican American politicians in the US who's whole response to their platform against illegal immigration was literally that they're closing the door on people behind them (jumping the border). Understandably there will be people like that, but that they'd get elected and can espouse such beliefs shows that there are people out there with seriously messed up values.
- collyw 9y agoDid these people get in legally or illegally? If they played by the rules I can understand them, being annoyed at people that don't.
- chrischen 9y agoI think it was the Daily Show or something like that. They specifically highlighted that the guy got in illegally. This isn't the guy they highlighted (person was a man), but similar: https://www.csmonitor.com/USA/2011/0913/Susana-Martinez-Can-a-Latina-governor-be-anti-illegal-immigration https://www.csmonitor.com/USA/2011/0913/Susana-Martinez-Can-... That being said, nothing wrong with being against illegal immigration. It's illegal for a reason. But being a beneficiary of it and not being understanding of it takes a certain type of skill.
- zerr 9y agoYes, Barcelona is even worse - I see senior devs are paid 35-45K.
- nkkollaw 9y agoIn Italy, 15-20k
- mantas 9y agoI assume that's after taxes? But even then, eastern europe is paying more...
- dogma1138 9y agoYou want good pay go to Romania IT pays more than in some W. Europe countries and you pay little to no tax due to incentives.
- ccozan 9y agoYes, but in Cluj the rents are also quite high, since the hitech hub expanded there. Not sure about Iași or Brașov. Bucharest was expensive before and not quite to recommend.
- poloniculmov 9y agoYou can get a 2 room apartment close to the subway/city center for around 300 euro and there are plenty of apartments on the market.
- nkkollaw 9y agoYes, after taxes. Taxes are about 45%. In Poland (where I live, although I'm from Italy) they get 50k/y before taxes, but taxes are 19% flat and the cost of living is about half compared to Italy. Go figure...
- emptyfile 9y ago
- cfontes 9y agoAmsterdam is specially bad right now as well. Same problem, salaries are around 55-70k for a decent engineer and rent is at least 1.5k month for a tiny place. To me it's close to insane.
- khhh35575544 9y agoThing is though you can easily live in the Hague or somewhere closer and commute as transport is good. No one is forcing anyone to live in Amsterdam, right? I believe from personal experience that for plenty of London dwellers it's not the commute that puts them off moving out of London rather snobbery about alternatives. What amazes me is how far people are willing to stretch themselves financially due to snobbery. For me personally it's not worth the gamble.
- IkmoIkmo 9y agoIt's important to note Dutch taxes, too. 55k puts you at 4.5k a month gross, but 3k a month net. That's a 36k net salary of which 18k a year goes to rent (50%). And that's for a talented engineer. I know plenty of engineers with salaries around 40k, and the median salary is around 35k for all industries. On the other hand, 1.5k a month can get you a 2 bedroom 10 minutes from the heart of the city. I'm not sure what you're used to but it isn't that tiny for Dutch standards. Certainly plenty for a single person who can get a single bedroom in a decent location around 1100, too. And if you've got a partner or roommate, it's pretty trivial to pay less than 800 per person. Further, it's pretty easy to pay much, much less and still have a short commute to work. Again, it's not ideal but it's different from some US situations where you need to live 2 hours outside the city you work in, to afford the rent with the money that job earns you. In Haarlem, Utrecht, Hilversum are all 15-20 minutes away by car or public transport. But it seems to be getting worse quick, particularly for those who don't have a well-paying job and a family it's a shitty deal, you're essentially forced out of the city because social housing waiting lists are 15 years.
- collyw 9y agoThat sounds kind of similar ratios to Barcelona. Do you think its related to them being tourist cities pushing up proeperty prices. (On a side not Barcelona is pretty strict on AirBnB. Still screw AirBnB, there is no need for residential accommodation to be used as hotels when rents are getting ridiculous like this).
- IkmoIkmo 9y agoAny big urban centers, yes. But there's tons of smaller villages or tiny cities which are losing population. For a better quality of life for all, we have to start thinking about ways to spread this around more because now it's a one-way stream from low-density areas to high-density areas, the former has no future (it's emptying), the latter becomes unaffordable. (the more density, the more demand/production per square meter, the higher land prices and the higher all costs->prices of any production in that area, not just housing but anything). Population density can be very valuable (it's efficient, for one), and I'm a big proponent of cities in general, but there are limits. At some point density starts reducing quality of life.
- dba7dba 9y agoAnd I think google and other big tech companies can lead the way. It really is good for humanity and earth.
- adrianN 9y agoLower density living is not very good for the environment.
- zinckiwi 9y agoI think you're talking cross-purposes. All else being equal, higher density has the edge in many aspects. But the smaller cities need to build themselves up, rather than (in the tech industry at least) everyone flocking to the one or two hotspots in any country. Why the industry isn't embracing remote work is a mystery to me. I'm fortunate enough to work for a distributed company and the single biggest perk to me is that I don't have to live in SF (or the USA, for that matter).
- ptr 9y agoA small secret: here in Stockholm, the apartment prices have gone down recently; you can buy a 1-2 room apartment and pay less than $700/month in the city center (a down payment is needed though). The salaries for software engineers are typically 70k-100k USD.
- sgift 9y ago> (a down payment is needed though) That's the thing though, isn't it? If you have the money for a down payment you are probably not in the group of people most affected by rents spiraling up.
- jFriedensreich 9y agoalso is it not near impossible to actually get an appartment like that without putting your children on the waiting list allready?
- ptr 9y agoNo, that's for rentals. Most apartments in Stockholm are bought due to the rental market being the way it is.
- dagw 9y agoThe salaries for software engineers are typically 70k-100k USD. Are they? Most jobs I see seem to pay in the 40-50ksek month bracket. Don't think I've ever seen a 'normal' software engineering job paying over 60ksek. But admittedly it's been a couple of years since I was actively job-searching in Stockholm.
- ptr 9y agoI'm not sure how much the salaries have increased the last couple of years, but I'm regularly seeing offers of 50-60ksek (excluding bonus and options/equity) for a full stack or senior software engineer with a couple of years under the belt. I personally know SWEs that make 100ksek+. Lead SWE positions go for 60-80ksek.
- 9y ago
- IloveHN84 9y agoIn Berlin too: salaries stay much the same, but rents are skyrocketing. In 2010 a 40sqm apartment was around ~400/500€ in city ring, now they are around 700€, and the price is always without electricity and internet connection, which are extra. If you look for a 90sqm apartment, you have to plan 1400€ at least. In general, the more rooms you want, the more you have to pay for.
- jashmatthews 9y agoSalaries in start-up land are skyrocketing for high performing employees. SoundCloud had an average salary of ~€90k or something close to it. Lots of dual income, no kid hipster professional couples with tons of disposable income.
- Swinx43 9y agoI highly doubt that all employees are going to be paid that highly. The majority of tech jobs in Berlin does not pay even close to €90k per year. That is the problem with averages. You have a few people earning loads and the rest on much lower income. It would be much better to look at the Median income in Berlin.
- jashmatthews 9y agohttp://blog.honeypot.io/how-much-do-developers-earn-in-germany/ http://blog.honeypot.io/how-much-do-developers-earn-in-germa... People who could be working at FANG are pulling 80+k here amongst the well-funded startups or Siemens etc. Google Munich pays over €100k for their standard dev roles, AFAIK. Zurich is substantially higher, but it's genuinely more expensive.
- derEitel 9y agoNice overview, seems more accurate than most other salary reports. Do you know of a similar one that includes data scientists/ML engineers?
- zerr 9y agoBut salaries are stalled at 60-70K, right? EDIT: I mean for experienced engineers.
- ido 9y ago€60k/year is generally speaking a significantly above average salary for Berlin.
- sqidyyy 9y agoVery far above average.
- denzil_correa 9y agoDo we have an income distribution of salaries in Berlin (or Germany)?
- adrianN 9y agoIf you are a highly skilled engineer working for a big company maybe. Software engineers get like 40k. Normal people a lot less.
- deleted 9y ago[deleted]
- maephisto 9y agoThat used to be true. But lately, the demand has grown bigger and bigger and if you look over some job boards you'll see salary ranges that raise the average handsomely. On the other hand, 60k still is almost 3 time the average salary in Berlin so it can take you quite far.
- sarabande 9y agoGood developers can make significantly more than that because of foreign entrants and competition, see for example: https://stackoverflow.com/jobs/developer-jobs-in-berlin?sort=y https://stackoverflow.com/jobs/developer-jobs-in-berlin?sort...
- JanSt 9y agoGerman rents go up in most places. There was an influx of 1-2 million migrants and refugees, all of which need living space. Additionaly, it's very expensive to build living space because of very high special requirements for insulation and energy efficiency. It's not worth it / possible for investors to build profitable cheap living spaces, so mostly luxury apartments are build. There are also high ancillary cost (10-15% of price) - i.e. taxes, notary etc.
- elcapitan 9y agoThere's also a new system of rent control which probably makes it even more unattractive to invest.
- ibotty 9y agoBut that's not the reason _at all_ that the rents are skyrocketing. Were it implemented properly the "rent-brake" would prohibit high rents.
- izacus 9y ago1-2 million refugees are a tiny blip on German population and most of them came nowhere near Berlin. Poor people can't raise rents, the exploding tech sector and Berlin as a place for high-paid techies to move to has probably more to do with it.
- golergka 9y agoRenting in some place for a long time doesn't give you any leverage against another potential renters. If I want to move to Berlin and am willing to pay more than existing renters, I don't see any reason why I shouldn't be able to do so. > Lustig pays $300 a month from her $800 disability check for the 570-square-foot apartment, located in a newly fashionable district only a mile from Tiergarten, a leafy city park that's one of Berlin's most popular. $300 per month for even a small apartment in a good district is incredibly cheap. Why on Earth would you expect to be able to afford such a place on a disability check?
- sqidyyy 9y agotbh this is a very bad example. $300 (247€) for 570 square-foot (53m²) are just not realistic for a city like Berlin. The real price for such an appartment (in that district) is around 700-800€. Not to be "that guy" with the unpopular opinion here, but I'm not even sure if the landlord can even cover the costs for the apartment from what she's paying.
- jashmatthews 9y agoThe landlord knew exactly what he was getting into buying a tenanted property rented by someone on WBS social housing. Using your sister to evict your existing tenant is dodgy. I have zero sympathy for trying to game the system and getting caught out by your sister inconveniently dying.
- sqidyyy 9y agoI couldn't find any information in the article that it's WBS social housing. It says "located in a newly fashionable district" which doesn't sound like social housing.
- jashmatthews 9y agoIt's not. I missed the 32 years bit and assumed it was WBS because she's receiving long-term disability. Either way, you can't simply buy a building and evict the tenant in Germany. The landlord knew what he was getting into.
- eriken 9y agoIt seems rather far fetched to have such low rents over time in a big EU city like Berlin. It is unavoidable that capital will flow into the city and compete for real estate. Not only that, but how they expect to get investments if you cannot increase rent? Having a housing market based mostly on rent obfuscates the other side of housing, namely the owners need to take care of said house.
- ben_w 9y agoIf transportation is good enough, it isn’t that unreasonable. While I am impressed by Berlin’s public transport, that’s by comparison with the UK — Berlin shares one problem with the UK, however, and that is that high speed intercity trains feom nearish cities take an hour, but so to do internal trams, trains, S-Bahns and U-Bahns coming from the inside edge of the city.
- 738472527784 9y agoUhm, how do you know house maintenance costs increased as well? Seriously, what kind of argument is that. Just because other cities are expensive as fuck, Berlin has to be as well?
- lopmotr 9y agoIt's an endlessly recurring phenomenon of people that when they don't have any legal right to something but use it for a long time, they believe they have a permanent right to it. If you really value living somewhere, you can pay for that privilege and exclude other people who don't want it as much as you do. Somebody has to miss out when there's limited supply of housing.
- dx034 9y agoBerlin actually has a lot of potential supply, there's little geographical restriction and generally good public transport. Zoning laws are also comparably friendly (at least compared to SF and London). But real estate projects still take 3-5 years to complete.
- lopmotr 9y agoThat seems to be a common problem. In New Zealand, especially Auckland, there's a housing shortage so the local governments have relaxed zoning restrictions. But there's also a shortage of builders so they can't build fast enough and housing will stay expensive for years until that catches up.
- erikb 9y agoWell, it's not like the rents stay static until death. As the owner you can still find enough reasons to increase the rent for 2.5-3% each year which is above the official inflation rate.
- ben_w 9y agoI spent a few months last year in AirBnBs in Berlin, looking for a permanent place. From an outsider’s perspective, Berlin rents are ridiculously low unless you’re in the inner ring. Low enough I could cover the rent with money left over entirely from the rent I was collecting from a one bed flat I own in a small village in the UK, at the worst point of the €-£ exchange rate. Heck, I could usually do that with the AirBnBs too, despite their markups. Yes, there is definitely a housing shortage, but as they have rent control the problem I experienced was too many people viewing each place. In one case, there were about 80-100 people viewing the same appartment as me while I was there. Not that my experience is at all incompatible with locals having more problems from high unemployment or low wages.
- Swinx43 9y agoOut of interest, where in Berlin were the rents so cheap? I recently moved to the Berlin area and found rents to be on par with London for a 3 bedroom place. I have been visiting Berlin for the better part of 8 years and I am astounded at the increase I have seen in living costs. Food and entertainment has also gone WAY up. In my opinion Berlin is by no means the "cheap" city that it once was. When you combine that with the average salary in Berlin being lower than in other big German cities (and a lot lower than London) then it has become a real issue as of late for most people.
- ben_w 9y agoFrom memory: Prenzlauerberg, Pankow, Freidrichshain, Keukölln, Friedenau, Steglitz, Wedding, and Alt-Treptow.
- playing_colours 9y agoIn no way Prenzlauer Berg is cheap: it's a hip area, one of the most expensive, with Mitte in leaders. The cheap are Moabit, Wedding, Neukolln, Pankow. You can move further to Steglitz, Marzahn, Lichtenberg.
- 9y ago
- 1ba9115454 9y agoThe problem with rent control is that it causes more harm than good. Great for the lucky few that get a rent controlled apartment. Bad for people that don't and for landlords that now can't charge enough rent to cover the mortgage.
- distances 9y agoIn Germany mortgages are with fixed rates, so no surprises in interests. It's a somewhat incompetent landlord that takes higher mortgage than what the rent covers.
- dredmorbius 9y agoIron Law of Wages meet Law of Rent. David Ricardo rides again.