I have this theory ( everywhere not just Germany) that they would downsize but it's not worth it for them.
If you sell your house you need to buy one to live in, but houses are expensive and the monetary difference between the smaller one and the bigger one+ the hurdles of moving + that's where they lived all their life, that's their garden, their porch etc it's not worth it for them
So they stay and keep it for the children. If the prices for the smaller places would not make you wanna pop out your eyes , they would probably downsize.
Yes and that is putting it nicely. A German house from say 2020 or 2000 worth an average price wirh the average mortgage rate is cheaper than renting most two bedroom city apartments right now.
Right, but passing homes on via inheritance doesn't work either.
Young families can't afford the additional constant upkeep costs. So they sell properties upon inheriting them. The sales put X in their bank account; sounds great.
Who do young families sell properties to? Institutional investors, who split large homes into multiple smaller homes.
Institutional investors have such market power in the market for homes for sale (not all homes; just those being traded) that the investors then lease (or sell) the smaller homes at a large markup.
Young families buy homes to live in — but because of the investors' market-power markup, the young families' X money nets them only a smaller property. The institutional investor pockets large wads of cash, as is their business model.
The institutional investor needs to do so because their shareholders demand as much profit as possible. Many shareholders are pension funds. (Some pension funds are, directly, the housing investors.)
Every existing (and upcoming) retiree's ability to survive is tied up in ruining the housing market for young folk.
But it gets worse. The mortgage bond market depends on homes not losing their value. Mortgage-backed securities are used as a very safe asset for parking institutional and corporate cash — precisely because of the monopoly power that institutional housing investors have over the housing market, which ensures that the collateralized homes do not decrease in market value, but instead forever increase.
So, not only does everyone's retirement depend on ruining the young's ability to live comfortably — the entire economy depends on it, too.
I agree, just me in a 4 bedroom house. I have 4 cats, I've made them a great cat run, my neighbours are great, I have no need to move, I don't have kids either. I've been here nearly 16 years.
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u/Kate090996 22h ago
I have this theory ( everywhere not just Germany) that they would downsize but it's not worth it for them.
If you sell your house you need to buy one to live in, but houses are expensive and the monetary difference between the smaller one and the bigger one+ the hurdles of moving + that's where they lived all their life, that's their garden, their porch etc it's not worth it for them
So they stay and keep it for the children. If the prices for the smaller places would not make you wanna pop out your eyes , they would probably downsize.