Media Is Now Predicting A Massive 40% Property Price Crash

antrobus

GreatApe wrote: »

The UK and France are very similar in population Germany is a little larger.

Adjusted for population differences if Germany was the same population as the UK it would have about 16 million rented properties, the uk has about 5 million privately rented and 5 million social rented.

The easiest way to 'adjust for population differences' is to use percentages. That's what Eurostat do.

The you don't have to piddle around with arithmetic to make comparisons, and you have less chance of making mistakes.:)

GreatApe

bobbymotors wrote: »

france and germany have space. we don't.

hence higher rents.

no that is not it, our earnings per household are higher so we bid higher rents because we can afford it

In the UK a typical rental is 2 persons, often a couple. If each earn £25,000 that is a £50,000 household income taxed quite low. In Germany a typical rental is 1 person and they may earn say 28,000 euros. So it is £50,000 or 28,000 Euro.

At twice the household income we can afford to bid twice as much.
Also utilities and property taxes etc also hit twice as hard on a single person rental than a dual person rental. The Germans have a crazy number of single person households. So while rents are cheaper many people still seem to spend more or less a similar amount per head on housing (rent + utilities + property taxes like council tax)

GreatApe

antrobus wrote: »

The easiest way to 'adjust for population differences' is to use percentages. That's what Eurostat do.

The you don't have to piddle around with arithmetic to make comparisons, and you have less chance of making mistakes.:)

no because there is a huge difference in the number of homes per capita figure

antrobus

GreatApe wrote: »

no because there is a huge difference in the number of homes per capita figure

Then why adjust for population? You should be using housing stock. Your argument makes no sense.

And if France and Germany have more homes per capita doesn't that mean that we should to?

GreatApe

It is actually counter intuitive.

Lets pretend the UK has zero population growth going forward and we built an additional 5.5 million homes. That on first thought would lead us to believe 1 house price crash 2 rent price crash 3 ownership boom and rental crash

However building 5.5 million additional homes would mean we have the same number of homes per capita as Germany does today. The Germans do indeed have lower house prices and rents so that proves 1 and 2 but they have much lower ownership and much higher renting which disproves 3

The reason seems to be as rents fall (as supply is added) more and more people decide they are still happy to spend ~25% of their income on rent so they go from sharing a rental with 1-2-3 others to renting a property all to themselves. Single occupancy renting booms

I think that is what would happen in the UK.
If we built a lot more homes (which are not needed imo) we would just see more and more single occupancy renting. Rents will be cheaper but many renters will have no more money in their pockets at the end of the month as they go from sharing rent and bills to renting a flat all to themselves.

Also the uk has for all intents zero empty homes while Germany has a lot of empty homes. That would also happen in the uk we would build 5.5 million additional homes but maybe 1-2 million of them will sit sit empty (and thus hold down rents and prices)

I also believe the much higher single occupancy household rate in Germany contributes to their very low fertility rate. So many people in Germany live alone simply because they can because Germany has too many homes. People that live alone have no kids. A mass build of 5.5 million homes so we have cheap houses and cheap rents and a housing market closer to the Germans could crash our fertility rate to German levels which would be a disaster

GreatApe

antrobus wrote: »

Then why adjust for population? You should be using housing stock. Your argument makes no sense.

You need to know the size of the housing stock, the percent that is owned and rented, and the population. Without knowing all 3 you get a much lessor picture

And if France and Germany have more homes per capita doesn't that mean that we should to?

Maybe, maybe not. Just because country x has more does not necessarily mean it is a good idea.

Housing is also a huge part of... well everything in life and economics. For instance if we had per capita as many homes as the Germans I suspect our total fertility rate would crash. Our rate is already below replacement and if you look at uk born woman its well below replacement. It would be ironic if a mass build of houses leads to a crash in fertility which leads to a need to import more migrants to maintain a sustainable dependency ratio.

AdrianC

It's also worth remembering that France has a large number of second homes - both for the French and for other nationalities.

zagubov

GreatApe wrote: »

You need to know the size of the housing stock, the percent that is owned and rented, and the population. Without knowing all 3 you get a much lessor picture



Maybe, maybe not. Just because country x has more does not necessarily mean it is a good idea.

Housing is also a huge part of... well everything in life and economics. For instance if we had per capita as many homes as the Germans I suspect our total fertility rate would crash. Our rate is already below replacement and if you look at uk born woman its well below replacement. It would be ironic if a mass build of houses leads to a crash in fertility which leads to a need to import more migrants to maintain a sustainable dependency ratio.

Are you saying that if we had loads of excess housing available our birth rate would somehow collapse? Not sure I get this.:o

economic

GreatApe wrote: »

It is actually counter intuitive.

Lets pretend the UK has zero population growth going forward and we built an additional 5.5 million homes. That on first thought would lead us to believe 1 house price crash 2 rent price crash 3 ownership boom and rental crash

However building 5.5 million additional homes would mean we have the same number of homes per capita as Germany does today. The Germans do indeed have lower house prices and rents so that proves 1 and 2 but they have much lower ownership and much higher renting which disproves 3

The reason seems to be as rents fall (as supply is added) more and more people decide they are still happy to spend ~25% of their income on rent so they go from sharing a rental with 1-2-3 others to renting a property all to themselves. Single occupancy renting booms

I think that is what would happen in the UK.
If we built a lot more homes (which are not needed imo) we would just see more and more single occupancy renting. Rents will be cheaper but many renters will have no more money in their pockets at the end of the month as they go from sharing rent and bills to renting a flat all to themselves.

Also the uk has for all intents zero empty homes while Germany has a lot of empty homes. That would also happen in the uk we would build 5.5 million additional homes but maybe 1-2 million of them will sit sit empty (and thus hold down rents and prices)

I also believe the much higher single occupancy household rate in Germany contributes to their very low fertility rate. So many people in Germany live alone simply because they can because Germany has too many homes. People that live alone have no kids. A mass build of 5.5 million homes so we have cheap houses and cheap rents and a housing market closer to the Germans could crash our fertility rate to German levels which would be a disaster

But we also have tinder too.

GreatApe

zagubov wrote: »

Are you saying that if we had loads of excess housing available our birth rate would somehow collapse? Not sure I get this.:o

I dont know it's just an observation

Germany has many millions of single person households. Something like 16-17 million homes are lived in by just a single occupant in Germany. That may play a part in them having so few children