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Why Wasn't There a Housing Bubble in Germany?

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  • Why Wasn't There a Housing Bubble in Germany?

    Anyone?

    Why a bubble in the UK and not in Germany?

  • #2
    Because it's a sad and pathetic country whose only claim to fame is that it once let a depressed painter with a funny mustache try to exterminate the world using its resources?
    Click here if you're having trouble sleeping.
    "We confess our little faults to persuade people that we have no large ones." - François de La Rochefoucauld

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    • #3
      Originally posted by Lorizael View Post
      Because it's a sad and pathetic country whose only claim to fame is that it once let a depressed painter with a funny mustache try to exterminate the world using its resources?
      Why do you hate the UK so much.
      Blah

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      • #4
        Just taking a shot in the dark... but maybe it has something to do with a deeply rooted idea of home ownership for all in the English speaking world. As in trying to own a home as soon as possible even if its well out of your reach. Because the housing bubble seems to have troubled the Anglo nations worst of all.

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        • #5
          Originally posted by BeBro View Post
          Why do you hate the UK so much.
          Because they taxed me without representation!
          Click here if you're having trouble sleeping.
          "We confess our little faults to persuade people that we have no large ones." - François de La Rochefoucauld

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          • #6
            I would imagine it was because they didn't deregulate banking and/or refuse to regulate new complex financial instruments like MBSs. That means banks weren't freed to leverage themselves several more additional times and lenders weren't free to offload risk on to a greater fool. No bubble, no bust.
            Try http://wordforge.net/index.php for discussion and debate.

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            • #7
              Re op, I'm not really into these things, but my personal impression from the US (dunno UK) was that at the height of the housing hype nearly everyone could go into massive debt to buy a house (was that the case?). I think that is not so easy here. Of course you can take credits to buy stuff (cars, houses whatever), but the banks look more if you're actually in a position to pay something back.

              (For private customers that is. Overall the German banks themselves were involved in a lot of nonsense as well.)
              Blah

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              • #8
                Q: Why Wasn't There a Housing Bubble in Germany?
                A: Schnitzel
                "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
                Ben Kenobi: "That means I'm doing something right. "

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                • #9
                  Germany had a housing bubble in the 90s that it is still working off, so wasn't primed for another go at it this time around. The country's just out of phase with the rest of the Western world.
                  I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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                  • #10
                    That really does sum up Germany, doesn't it...
                    "The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
                    Ben Kenobi: "That means I'm doing something right. "

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                    • #11
                      Originally posted by Oerdin View Post
                      No bubble, no bust.
                      Yep. It was our lax standards, plus low-interest rates, that fueled our bubble. Everything worked as long as housing prices went up. But once they started down: POP.

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                      • #12
                        Originally posted by DanS View Post
                        Germany had a housing bubble in the 90s that it is still working off, so wasn't primed for another go at it this time around.
                        Blah

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                        • #13
                          They actually have a bubble... However, prices aren't crashing because people aren't overly leveraged...
                          "Ceterum censeo Ben esse expellendum."

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                          • #14
                            Originally posted by BeBro View Post
                            Re op, I'm not really into these things, but my personal impression from the US (dunno UK) was that at the height of the housing hype nearly everyone could go into massive debt to buy a house (was that the case?). I think that is not so easy here. Of course you can take credits to buy stuff (cars, houses whatever), but the banks look more if you're actually in a position to pay something back.

                            (For private customers that is. Overall the German banks themselves were involved in a lot of nonsense as well.)
                            1. Is it possible in Germany to buy a house with 0% down payment? (Here: not any more)
                            2. Was it possible prior to 2008? (Here: it was customary to do so)
                            3. Are most mortgages in Germany with fixed or variable interest rates? (Here: variable)
                            4. What was the average interest rate for house loans before 2008? (Here: it went as low as 4%)

                            Are Germans a mobile or a stationary people? As in, do people commonly move from Berlin to Munich in order to find work, or do people prefer to live in the same place their entire life? Are unemployed (on benefits) in one city obliged to take up a job offer in another city?

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                            • #15
                              Maybe it also has a lot to do with the fact, that in germany there is a plethora of regulations you have to obey if you want to build a house.
                              From environmental regulations (things like thermal insulations), to building material and even the height of ceilings and entrances (in one case a house was half built when a governmental inspector discovered, that one of the entrances in the 2nd story was ~5 cm lower than allowed (like 1.70 m instead of > 1.75 m ) therefore the ministry withdrew its building permission for the house and the owner had to stop all other costruction works, until he had done a reconstruction of said entrance, so that it was >1.75 m).
                              Due to these regulations in contrast to (for example) the USA the usual building material is concrete and you will find no (or almost none) residential houses that are made of wood.
                              All in all this also means that (compared to the USA) building a house is much more expensive and only a small percentage of the german population owns a house (or plans to own one). Germans, as BeBro already said, rather obtain credits for home furnishings (like washing machines and furniture) or cars and are rather reluctant to obtain the large credit they would need to buy/build their own house. The average german rather lives in an appartment or condomium than in his own house.
                              (of course a nice side effect of said regulations is, that hurricanes like the ones in the USA would do much less damage if they would hit a german village/city)

                              ( I don´t know however how hard it is to obtain a building permission in the UK compared to the USA and Germany, but I assume that it is easier than in germany)
                              Tamsin (Lost Girl): "I am the Harbinger of Death. I arrive on winds of blessed air. Air that you no longer deserve."
                              Tamsin (Lost Girl): "He has fallen in battle and I must take him to the Einherjar in Valhalla"

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