3 ms·

It's pretty much the same for anything around the city of hamburg in the north and most of the time it's less about the houses and more about the land they sit

It's pretty much the same for anything around the city of hamburg in the north and most of the time it's less about the houses and more about the land they sit on. Building got more expensive but land even more so. 1.000 EUR/m² of land for adjacent cities are becoming the norm. Most of my friends graduated from university with either a bachelor or a masters degree and only those who stand to inherit a sizable sum of money or their parents home are going to have houses. A 50k salary simply won't cut it. Most have given up on the dream entirely since 30+ years of debt is not something they can justify. As a quick back of the envelop calculation: Let's say you had a household income of 86k for two people (43k+43k) which translates to about 4550 EUR per month after taxes, health insurance and pension fund. Their cost of living on average (not including rent) in the hamburg area would be somewhere around the 1900 EUR mark, leaving about 2650 EUR per month. Since people need to save at least a little money, or go on vacation once in a while or repair their car or maybe they have kids it's probably generous to assume they could use 2000 EUR per month to pay off a house. Let's say you'd get a house for 600k all inclusive and you had to take on 500k of debt. With a current interest of about 2.76% fixed for 20 years and paying off 2000 EUR per month, then after 20 years you'd still be at about 224k of debt and you'd have paid 203k in interest. Assuming the same interest thereafter it would take a total of 30 years and 10 months to pay the house off entirely. During that time larger repairs or renovations are likely needed which would most likely forbid to pay off more than 2000 EUR per month. Now one could argue that people could find places for half as much in rural areas but then again, lots of professions won't find any jobs there and those that do often get paid way less. Somehow the situation saddens me. My parents bought a semi-detached house 20 years ago for 200k (which would be 264k today adjusting for inflation). Two identical semis in the same street got sold last year, each for more than 500k, so pretty much double the inflation adjusted prices albeit being 20 years older houses now.

ido 4y ago
I don't disagree that the housing market in german cities is overheated, but isn't it pretty standard to take 30+ year mortgages? Keep in mind that 20+ years into paying this back your monthly payment will not increase to 2042 levels but remain in current 2022 levels.
- Escapado 4y ago
  When I talked to my parents they told me most of their peers would pay off their mortgage within 20 years but maybe times changed, I don't know the data on that. I am 30 now and I have trouble imagining being in debt for a time equivalent to my entire lifetime so far - just to live in a house. 15 years sounds so much more bearable emotionally but it's probably never gonna happen. You are obviously right about 2042 payment levels probably being different but that also hinges on inflation being positive - but I would agree that that's more probable than deflation.
  - ido 4y ago
    I think you think that because buying (rather than renting) is not traditionally that common in German/Austrian cities. In other countries it's perfectly expected that you take a mortgage for 30+ years if you buy a house, it's the same* as paying rent for 30 years except you get to own the house at the end * i know it's not exactly the same, e.g. you need a downpayment and you have to pay for maintaining the house but it's not like you wouldn't have had to pay rent the same 30+ years had you rented instead of bought.
  - Handytinge 4y ago
    > I am 30 now and I have trouble imagining being in debt for a time equivalent to my entire lifetime so far - just to live in a house. I can empathise. 10 years ago, I had friends in their early 20s "buying a house" (signing up to a debt of $1.2m+ dollars over 30-35 years for a $700k house), and could not see the value propositon for the emotional turmoil. Looking back years later, they don't seem so stressed by it, but it's definitely affected their ability to make decisions around their job, relationships, social life, etc. But they've all made pretty strong profits (on paper, assuming they ever sell). I bought a house for cash instead. The trade off of living further away is much better to me than feeling enslaved and not in control for decades. Buy some land if you want - a small package in a small town 30 minutes past all the developments. You'll probably find once you've paid off the mortage in 5-10ish years, the area has built up and you're in a non rural position with a good block.
    - 4y ago

ido 4y ago

I don't disagree that the housing market in german cities is overheated, but isn't it pretty standard to take 30+ year mortgages? Keep in mind that 20+ years into paying this back your monthly payment will not increase to 2042 levels but remain in current 2022 levels.

Escapado 4y ago
When I talked to my parents they told me most of their peers would pay off their mortgage within 20 years but maybe times changed, I don't know the data on that. I am 30 now and I have trouble imagining being in debt for a time equivalent to my entire lifetime so far - just to live in a house. 15 years sounds so much more bearable emotionally but it's probably never gonna happen. You are obviously right about 2042 payment levels probably being different but that also hinges on inflation being positive - but I would agree that that's more probable than deflation.
- ido 4y ago
  I think you think that because buying (rather than renting) is not traditionally that common in German/Austrian cities. In other countries it's perfectly expected that you take a mortgage for 30+ years if you buy a house, it's the same* as paying rent for 30 years except you get to own the house at the end * i know it's not exactly the same, e.g. you need a downpayment and you have to pay for maintaining the house but it's not like you wouldn't have had to pay rent the same 30+ years had you rented instead of bought.
- Handytinge 4y ago
  > I am 30 now and I have trouble imagining being in debt for a time equivalent to my entire lifetime so far - just to live in a house. I can empathise. 10 years ago, I had friends in their early 20s "buying a house" (signing up to a debt of $1.2m+ dollars over 30-35 years for a $700k house), and could not see the value propositon for the emotional turmoil. Looking back years later, they don't seem so stressed by it, but it's definitely affected their ability to make decisions around their job, relationships, social life, etc. But they've all made pretty strong profits (on paper, assuming they ever sell). I bought a house for cash instead. The trade off of living further away is much better to me than feeling enslaved and not in control for decades. Buy some land if you want - a small package in a small town 30 minutes past all the developments. You'll probably find once you've paid off the mortage in 5-10ish years, the area has built up and you're in a non rural position with a good block.
  - 4y ago