Yes, Other Countries Do Housing Better, Case 2: Germany

You can’t pump billions in subsidies into the market, lower interest rates to the floor to prevent that money from going around capital markets and not expect some kind of dysfunctional price rise in the real estate market. Money finds its way to where it provides the best return, and right now that is real estate in most markets. Trying to fight this tide at the real estate end is somewhat futile. The governments need to give the money a better place to go.

Sounds like we're returning to good ol Feudalism.

In general, at least around big cities(100 km radius from München, for example), the "german" population does not afford a house. A new house is around 450000 euros and the land under it is also between 200 - 500 Euros per square meter. For a lot of people, especially migrants, this is undoable. If course if you go in forgotten places with no industry, no public transport and a lot of neo nazis you can find affordable housing.

That only 40% of Germans have any interest in buying doesn't mean that 60% of Germans have no clue. It means that they have a system where buying isn't nearly mandatory. Rents are often only barely higher than the cost of capital for buying plus maintenance.

Both have grown, particularly in Berlin and some other places. (I live in Munich, which has had very high prices by German standards for a long time.) But that growth doesn't mean that the cost of renting is much higher than the cost of a bank loan plus maintenance etc. AFAICT, both have grown together.

Unless you mean that as a hyperbole, I doubt it very much. Prices for flats, I believe, range from 400.000EUR up, and investing that much into renovations would bring you a marble, teak and gold leaf finishing house.

is renting not an option? Why is only purchasing counted?

I'd note that Doctors and Engineers don't really get high salaries compared to the US though. Europe is all about landlordism and inheritance.

It's a function of how incredibly high wealth disparity is. Go to the richest part of town in any big city sometime in the evening. >70% (often more than 90%) of the lights are off, because nobody is home in these multimillion $ homes, because they are 2nd, 3rd or 4th home. So the people who can afford houses that >90% of the people can never afford, can buy many of these without blinking an eye.

The expected market price of a home in terms of rent should be “what you can afford”, and with that argument the expected purchase price would be the number that makes the capital cost of a loan the same as the rent (minus some maintenance and other factors).

If interest rates are tiny then the expected mortgage for a house will be huge. Especially if there are no regulations requiring the length of mortgages.

House prices in attractive areas (in and around Tokyo) have increased drastically over the last few years.

Meanwhile, houses in the countryside are on the market for almost (and often literally) nothing.

I guess the question is what the data is actually measuring. would still expect the graphs to show an increase if they measure the price of actually sold property.

Just checked OECD data and to me it looks like prices are rising in similar ways in Germany and the US since 2015. Japan does in fact seem less steep but it's still rising, not flat as the graphs on TFA would suggest: https://data.oecd.org/chart/6ztU

The goal is affordable housing. With good housing stock, that means people can own OR rent in an affordable manner, depending on what they need.

But you're right that any article describing UK housing as "affordable" needs suspicion. Should also compare by size; the one advantage the US does have is much larger houses, on average.

First of all, compared to the rest of Europe houses are small - my parents have a house that's slightly larger than the average, it has 3 bedrooms in 90m2 including the garage. The housing stock - even new houses - are all pretty inefficient and need a lot of energy to heat. The rest of Europe has been pushing energy efficiency standards (in terms of heating demand), especially Scandanavia and the Baltic's, while the UK has pretty much stood still and builds houses today the same as they did 30 years ago.

For this you are going to be paying a lot. Two people on average salaries would not be able to get a mortgage for my parents' house, and it's not anywhere near London or other big cities. And that's assuming you could earn an average salary - in their area that would be a bit of a push as most of the jobs are in the service and tourism industry.

If rent is dirt cheap, and tenant protections are large, most people prefer to pay little rent, and invest their money in stocks or some other asset, than put all of their money into a single asset with very questionable performance and high risk (a house).

You can have financial independent, fully passive income from stocks, and just pay a little bit of rent with it. Or you could have a house, be tied to a 60 year credit plan, and have to work until you are 70 years old.