5 ms·

Why is that? Like, on the US west coast, ballooning home prices makes sense because their cities are in valleys with a fixed amount of land, but munich looks l

by mrep 6y ago

Why is that? Like, on the US west coast, ballooning home prices makes sense because their cities are in valleys with a fixed amount of land, but munich looks like it has a bunch of farmland around it that could be converted into housing increasing supply and thus decreasing prices. This coming from someone in chicagoland which has 9.5 million people but housing isn't crazy because the metro area sprawls 30-40 miles out into what used to farmland.

thehashrocket 6y ago
If we keep plowing over farmland to build suburbs where will the farming get done?
- majidazimi 6y ago
  Build taller. Skyscraper has been invented long time ago.
- elindbe2 6y ago
  In areas not close to Munich?
ChuckNorris89 6y ago
Because Germany is mostly old money, inherited for generations, that is very risk adverse so instead of investing it in new SW companies or buying stocks, they park it in real estate in desirable areas and prop up this bubble since it's a sure bet for a return on investment. That's why they call it Beton Gold ("concrete gold").
- elindbe2 6y ago
  That doesn't explain the lack of new building though. Is it NIMBYism?
  - jdsully 6y ago
    Munich has very strict limits on vertical height so that cathedral spires aren't drowned out by the buildings. On the edge of the city you do see some taller office buildings but not in the core, and certainly not to the extent you would expect in a major city.
ksec 6y ago
I think it has more to do with world wide's low interest rate which is pushing asset prices to sky rocket. You now get a fast shrinking middle class and dismal living condition in lower class. Of course, they could have combated this with more supply. Not sure if they have done so.
- mrep 6y ago
  Low interest rates certainly allow you to afford a more expensive home, but inflation adjusted price per square foot isn't actually skyrocketing for most of the US outside of the west coast [0]. For example, Dallas/Fort worth and Houston metro populations, the 4th and 5th largest in the US have both grown a whopping 19% in the past decade and prices aren't skyrocketing there. But they have plenty of land surrounding their cities that can be developed to increase the housing supply. It just seems weird to me. Why are people paying such high prices when there is farmland so close by that you could buy and use to build some condominiums, townhomes, duplexes or even single family homes. [0]: https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/

by mrep 6y ago

thehashrocket 6y ago

If we keep plowing over farmland to build suburbs where will the farming get done?

majidazimi 6y ago
Build taller. Skyscraper has been invented long time ago.
elindbe2 6y ago
In areas not close to Munich?

ChuckNorris89 6y ago

Because Germany is mostly old money, inherited for generations, that is very risk adverse so instead of investing it in new SW companies or buying stocks, they park it in real estate in desirable areas and prop up this bubble since it's a sure bet for a return on investment. That's why they call it Beton Gold ("concrete gold").

elindbe2 6y ago
That doesn't explain the lack of new building though. Is it NIMBYism?
- jdsully 6y ago
  Munich has very strict limits on vertical height so that cathedral spires aren't drowned out by the buildings. On the edge of the city you do see some taller office buildings but not in the core, and certainly not to the extent you would expect in a major city.

ksec 6y ago

I think it has more to do with world wide's low interest rate which is pushing asset prices to sky rocket. You now get a fast shrinking middle class and dismal living condition in lower class. Of course, they could have combated this with more supply. Not sure if they have done so.

mrep 6y ago
Low interest rates certainly allow you to afford a more expensive home, but inflation adjusted price per square foot isn't actually skyrocketing for most of the US outside of the west coast [0]. For example, Dallas/Fort worth and Houston metro populations, the 4th and 5th largest in the US have both grown a whopping 19% in the past decade and prices aren't skyrocketing there. But they have plenty of land surrounding their cities that can be developed to increase the housing supply. It just seems weird to me. Why are people paying such high prices when there is farmland so close by that you could buy and use to build some condominiums, townhomes, duplexes or even single family homes. [0]: https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/