Reason I googled it? Overheard my better-half’s morning news show while she was preparing for her day. She props her iPad on a shelf under the mirror in the hotel bathroom. She streams the news from Germany. Even though we’ve been away from Das Vaterland for just over a week, the saying holds tried & true: you can take her out of her country but you can’t take her country out of… Anywho. During the newscast the word Blase (bubble) was used several times in the context of the German real estate market. This woke me out of my drowsy state as I had a rough night of sleep, got up around 2:30am and tried to worst-write to compensate–but nothing helped. A big segment of the German newscast was the announcement by the ECB of lowered interest rates, which are now near zero, and the consequence that may have on real estate and the suckers who bought in the last few years. Of course, the real reason my eyes popped open was because the news report said only what I’ve been saying for the past three or so years. Vindication is a great source of wake-me-up. Not only am I worst-writer, dear worst-reader, but I’m also an arm-chair economist, a pseudo news debunker and an all-around wannabe polymath. That said, I love it when I’m proven RIGHT. §We started looking at real estate in Germany around seven years ago. Four years ago we moved from Wiesbaden to Cologne where the search continued. One thing held true the whole time we were searching to make the purchase of life-time. Etwas stimmt nicht im Land der über Optimismus. The whole time we were looking to buy a house or a flat it felt as though we were competing with others who purchased on the basis of now or never or panic. I kept getting the feeling, with every agent we spoke to, that something was wrong with the real estate market in Germany. My better half, of course, being the optimist that she is, would have none of my nonsense. She held that the over-priced market (at least she did admit to prices being very odd) was the way it was because Germany was a stable economy and there was Ordnung and the daffodils that bloom during the few days of sunshine in spring look the same in the dark-grey days of the rest of the Germanic year. She never believed me when I told her that the reason we couldn’t fulfil her dream of owning a home (which is still a pretty big deal for most Germans) was because, although we are well-to-do, the housing market in Germany is not. It is in fact inflated, over-valued and preoccupied by a bunch of wannabe real estate sharks name Manfred or Heiner or Bierschen. In order to buy a house in Germany for the past (my worst-estimate) 20 years, you not only had to over come all the ridiculous costs of the bureaucracy and the mafia-like state that made laws that guaranteed that they would also get a share of your dream, but you had to compete with the bubble–and don’t forget all the real estate sharks. No one believed me when I said that there is no justification for the prices of real estate in Germany today. With globalisation and down-sizing rampant in the country, with all inheritance value from the wirtschafwunder used up, where is the money supposed to come from to buy all the real estate? Heck, VW just announced, in the wake of its ridiculous smoke screen that is supposed to hide managements choice to over produce, it’s gonna lay-off over three thousand people by 2017–most of whom are office workers. “Office” workers are supposed to be the ones that can afford to buy real estate. Or? §But like I said, the real estate market hasn’t felt right in Germany for years. Stuff is being built like crazy. It not only felt like there was an over supply of new houses but there was also an over supply of old houses that were being sold for the same price as new houses. Hello! Are you fucking kidding me. And get this. We made an offer on a house two years ago just south of Cologne. After several meetings with the agent we met one last time where I made my offer. I mean, we considered our offer for a few days. We spoke with people about how to do it. We thought we offered a fair price where we hoped negotiations would begin. Yet. We got absolutely no response from the agent. When we finally called him back, although he was supposed to return our first offer, he just said that the owner had decided to rent the place. Rent the place? For real? Ok. Fine. I guess if the owner can’t sell it–because he’s priced it waaaaaaaay to high, he has to then, at the least, rent it–to stop the bleeding of cash he must pay to maintain the mortgage. I turned to my wife and said: this is bullshit, its all a bubble. As of our leaving Germany to move to India for a few years, the guy still hadn’t sold the house. With that in mind, I feel bad for anyone in Germany who bought a house within the last few years believing/thinking that low interest rates were the reason to fulfil the dream. This most recent lowering of ECB rates means buyers will never get any equity out of their house and the price paid was a lie. Good luck suckers. Rant on. -Tommi
Links that motivated this post:
worstwriter 