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>Leases are often indefinite

How common is that today? In Austria most landlords stopped offering indefinite leases a long time ago, and are instead renewed every 3 years or so when they can increase your rent or kick you out.

Or if you have an indefinite lease it's automatically indexed by inflation which screws you big time if your wages aren't keeping up. The only indefinite lease currently in existence without inflation indexing are very old contracts who got grandfathered in but no landlord is crazy to offer that today anymore.

I don't think this is common in Berlin anymore. My last 3 leases had a limit of 3 years. My friends are all in similar situations.

It is not difficult to renew, though, but there will be a price adjustment.

I eventually caved and bought an apartment.

In my experience indefinite is pretty much the default here in Germany. I only heard about limited leases for students that only move to a certain location because of university.

A fixed term lease in Germany is only legal in some narrow circumstances and can’t be renewed multiple times in a row. I think after a few years the landlord has to offer you an unlimited lease.

Are German leases indexed to inflation at least?

Haven't met anyone which such a contract. It's usually a fixed value. The owner may choose to raise it every now and then, but laws limit it to a certain amount per year and there needs to be a reason, for example modernization or other buildings in the area are becoming more expensive.

You can of course make a contract that allows for automatic raises, but that is also limited (earliest 12 month after the begin of the lease, only a fixed/absolute value and not percentage) and you can no longer raise the price for the other reasons.

There are probably other models, but I don't know much about them.

Indexed and contracts with stepped rent are also a thing here, especially for sought-after zones/cities.

I e.g. avoid those if possible and we've moved out of an (inflation) indexed lease contract recently. Now back to just a regular (non-stepped/indexes) indefinite contract as usual.

As to why we dont buy: We like the flexibility and also property prices here make it hard to get sth. decent in comparison to renting.

In which country?

Every flat I've rented in Germany had indefinite leases in the last 30 years. Also didn't have inflation linked leases.

So you can live somewhere for 30 years while still paying the exact same rent from 30 years ago unadjusted for inflation? How does that work for landlords?

"exact same rent from 30 years ago unadjusted"

Straw man attack, I didn't say that. Nevertheless I'll give you an answer.

I had below inflation rent increase for some decades, yes. I also payed below market prices for some decades. The last flat we rented was 110qm, Prenzlauer Berg, 950EUR/month, market rate approx. 1800 EUR/month.

I do think the property ownership monetary model is more complicated than you suggest.

>Straw man attack, I didn't say that.

I wasn't attacking you, I was asking the the rental model makes sense for the landlord if he can't increase rent prices.

>I do think the property ownership monetary model is more complicated than you suggest.

I wasn't suggesting anyhting, I was asking.

>Nevertheless I'll give you an answer.

But from what I understand, you haven't explained. You've only said you were paying below market rate, But how does that work then?

I always assume that once you're in, it's hard to push you out or increase rent unreasonably. How close to market rate was the flat priced when you moved in?

They have another kind of adjustment, indirectly linked to inflation.

The details are complicated, Germans will accept very complex rules as long as the goal is seen as just, but if you want it simplified to just one sentence: If you're paying a very low price, the landlord can usually increase it slowly until it's fair for the property.

If the market price climbs past the rent you're paying, you'll begin to see some rent increases.

I always hat unlimited leases in Switzerland, also never heard around me about limited ones. So if there's a trend, it hasn't reached here yet. Yes it happened once that we were terminated when the owners died and the new ones wanted to rebuild - but the heads-up we got was one year.

> Leases are often indefinite

I've seen leases in the UK for 999 years. Not rentals though - leaseholds.

This is a very odd feature of UK housing. You pretty much go through all the steps of buying a property but in the end all you bought was the right to live in the place until the lease runs out.

It also leads to some oddities, like this [0] very cheap flat a stone's throw away from Regent's Park. It's this price because there are less than 10 years left in the lease and I imagine the current tenants/"owners" couldn't renew it. This could happen for many reasons, e.g. the "actual owner" or freeholder wants to raise the lease value too much, or the freeholder couldn't be found. In the latter case I'm not sure what happens, but I imagine it's possible that no one will ever claim the property - and I have no idea in what legal standing this leaves the property.

This is the most common form of "ownership" of flats and apartments. Houses are generally "freeholds", which means you actually own the property.

[0] https://www.rightmove.co.uk/properties/142789514

This is currently part of a big political debate, and _might_ change, although the current government have dodged it so far:

- https://www.bbc.com/news/uk-politics-67569517

- https://commonslibrary.parliament.uk/leasehold-reform-in-eng...

- https://www.theguardian.com/society/2023/nov/04/labour-promi...

Much of the rest of Europe & elsewhere heavily uses a commonhold model (https://www.lease-advice.org/advice-guide/commonhold/) where all owners of flats in a block collectively own the shared structure of the block itself, and share responsibility for maintaining that as required, with a communal budget and democratic voting on decisions.

I'm aware of the debate. Do you have any idea what will happen to the people currently on leaseholds if this goes forward?

I imagine they're either not going to be affected at all (i.e. stay on leasehold until the lease runs out), at which point either:

- It gets converted to a commonhold (potentially necessitating some form of compensation to the current freeholder); or

- It stays in the same regime.

In the former case, there's the chance that existing leaseholders will be priced out of their residence if they're unable to acquire their share of the commonhold.

In the latter, their property value will likely plunge as it's less attractive than the new ones.

Of course, the alternative to this is that commonholds are priced up accordingly but that will probably make them inaccessible to most people and perhaps even more expensive than freehold houses.

In China, you only buy leases, some as short as 30-40 years, but most around 90 years.

> or the freeholder couldn't be found

When does squatting rights become in play?

What happens if a leaseholder doesn't move out? Do freeholders have extra rights to kick people off property beyond what landlords do?

There's also the high transaction cost.

https://www.iwkoeln.de/fileadmin/publikationen/2016/310521/I...

> The cost of a real estate agent would increase the transaction costs considerably; but since the use of housing brokers is not mandatory, they are left out of the calculation.

Could somebody with more insight than me comment on the total transaction costs? To me it seems like this is one of the main reasons for people to refrain from buying, because it locks them in.

Also, in Berlin at least, prices for buying are skyrocketing. Rents are increasing as well, but probably can't increase as much because of protections.

Isn't this changing soon (or at least when the Renter's Reform Bill passes[1])?

Contracts will not have fixed terms anymore and "no-fault" evictions will be illegal. Those are two main ones I think.

[1] - https://bills.parliament.uk/bills/3462

> often with just 1 month notice periods

This is mostly not the case - a 2-month notice period is way more common. It might not even be legal with a typical shorthold tenancy.

So what happened to Berlin? It went to a nice cheap affordable city to an Anglo style neoliberal nightmare. I realize it got popular and people moved there but if there are such renter friendly laws in place how did Berlin end up like it did?

I don't think any rent control/relaxed zoning regulations can survive popularity with new residents that have substantial buying power. Berlin was cheap for so long because it wasn't popular, but it had everything to be popular, and so eventually would be.

Tokyo would be the same if salaries/wages in Tokyo weren't so depressed.

> if they evict you to personally live in the flat as their main residence

...even this is pretty much impossible after 20 years AFAIK.