3 ms·

EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. Houses, like other goods, decrease in value over time

EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. Houses, like other goods, decrease in value over time. A new house should be significantly more expensive than a 50 year old house - just like a car.

ben_w 2y ago
> EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. I was picking the absolute lowest cost for an example, so on one hand it should have. On the other hand, what's that in "years of average income", and does it seem reasonable that half of this is the land itself?
- tossandthrow 2y ago
  I think the rule of thumb is that you should not buy at more than 4x household income. I know that the salaries in Berlin are in the lower end, but 100k EUR a year in household income seems like a reasonable expectation for people wanting to live in attractive areas.
  - ben_w 2y ago
    The median pre-tax household income in Berlin is €43,572, not everyone gets to be on software engineering pay scales: https://allaboutberlin.com/guides/salaries-in-germany https://allaboutberlin.com/guides/salaries-in-germany But even if the median income were €100k, the €400k level was around the cheapest I could find that you could actually live in and wasn't a weekend house, or a reverse-mortgage you'd only get to use when the seller died, or a building opportunity with no land, or they're rented out and as Germany has fantastic protection for tenants you are not going to move in etc. If the standard is 4 years, even then you'd be excluding 50% of the households from ownership at €100k/year and €400k minimum prices. As is, €43k/year is closer to 9.5 years income still not being enough for 50% of households.
    - tossandthrow 2y ago
      > not everyone gets to be on software engineering pay scales Not everyone gets to live the most popular places. > The median pre-tax household income in Berlin is €43,572 Seems like Germany can not afford to not allow mothers into the work place. Edit: At a median household income of EUR 43k the issue is not housing prices. in Denmark the median salary (not household) is 73.000 EUR a year. I think Germans need to negotiate their salaries.
      - ben_w 2y ago
        > Not everyone gets to live the most popular places. Definitionally, everyone who actually lives in a place must be able to afford that place. If people suddenly can't, they leave, it's now less popular. Right now, it's rent controls which allow most Berliners to live in Berlin. Without that, many would be forced to leave, making the city less popular, and thus less expensive. (Perverse incentives, yay!) > Edit: At a median household income of EUR 43k the issue is not housing prices. in Denmark the median salary (not household) is 73.000 EUR a year. I think Germans need to negotiate their salaries. Negotiate with whom? Where would the extra money come from? https://www.wolframalpha.com/input?i=germany+gdp+per+capita+euros%2C+denmark+gdp+per+capita+euros https://www.wolframalpha.com/input?i=germany+gdp+per+capita+... Making a country richer isn't as easy as printing more money. They tried that, it didn't end well.
        tossandthrow 2y ago
        As a salaried person one has a responsibility of putting and upwards pressure on the salary (with the help from unions) - companies have the responsibility of making their ventures profitable. Anecdotally, Tesla Berlin pays in the range 50-60k/year in Berlin (for SWE roles) - I am quite sure they are able to pay muuuch more. So either are workers in Berlin less than half as effective as Tesla's other offices or Berliners accepts a much lower pay. GDP is a number - If the Berliner kebab was priced at 12 EUR instead of 6 EUR, then they could afford paying double the salary - The rest of the world is about to add zeroes to everything. Why wouldn't Berlin? My thinking is that this is Europeans focussing on "budget rather than profitting".

ben_w 2y ago

> EUR 400k for a newly build home in the greater Berlin area seems like extremely affordable in my opinion. I was picking the absolute lowest cost for an example, so on one hand it should have. On the other hand, what's that in "years of average income", and does it seem reasonable that half of this is the land itself?

tossandthrow 2y ago
I think the rule of thumb is that you should not buy at more than 4x household income. I know that the salaries in Berlin are in the lower end, but 100k EUR a year in household income seems like a reasonable expectation for people wanting to live in attractive areas.
- ben_w 2y ago
  The median pre-tax household income in Berlin is €43,572, not everyone gets to be on software engineering pay scales: https://allaboutberlin.com/guides/salaries-in-germany https://allaboutberlin.com/guides/salaries-in-germany But even if the median income were €100k, the €400k level was around the cheapest I could find that you could actually live in and wasn't a weekend house, or a reverse-mortgage you'd only get to use when the seller died, or a building opportunity with no land, or they're rented out and as Germany has fantastic protection for tenants you are not going to move in etc. If the standard is 4 years, even then you'd be excluding 50% of the households from ownership at €100k/year and €400k minimum prices. As is, €43k/year is closer to 9.5 years income still not being enough for 50% of households.
  - tossandthrow 2y ago
    > not everyone gets to be on software engineering pay scales Not everyone gets to live the most popular places. > The median pre-tax household income in Berlin is €43,572 Seems like Germany can not afford to not allow mothers into the work place. Edit: At a median household income of EUR 43k the issue is not housing prices. in Denmark the median salary (not household) is 73.000 EUR a year. I think Germans need to negotiate their salaries.
    - ben_w 2y ago
      > Not everyone gets to live the most popular places. Definitionally, everyone who actually lives in a place must be able to afford that place. If people suddenly can't, they leave, it's now less popular. Right now, it's rent controls which allow most Berliners to live in Berlin. Without that, many would be forced to leave, making the city less popular, and thus less expensive. (Perverse incentives, yay!) > Edit: At a median household income of EUR 43k the issue is not housing prices. in Denmark the median salary (not household) is 73.000 EUR a year. I think Germans need to negotiate their salaries. Negotiate with whom? Where would the extra money come from? https://www.wolframalpha.com/input?i=germany+gdp+per+capita+euros%2C+denmark+gdp+per+capita+euros https://www.wolframalpha.com/input?i=germany+gdp+per+capita+... Making a country richer isn't as easy as printing more money. They tried that, it didn't end well.
      - tossandthrow 2y ago
        As a salaried person one has a responsibility of putting and upwards pressure on the salary (with the help from unions) - companies have the responsibility of making their ventures profitable. Anecdotally, Tesla Berlin pays in the range 50-60k/year in Berlin (for SWE roles) - I am quite sure they are able to pay muuuch more. So either are workers in Berlin less than half as effective as Tesla's other offices or Berliners accepts a much lower pay. GDP is a number - If the Berliner kebab was priced at 12 EUR instead of 6 EUR, then they could afford paying double the salary - The rest of the world is about to add zeroes to everything. Why wouldn't Berlin? My thinking is that this is Europeans focussing on "budget rather than profitting".