House Price Crash - not likely...

[milanbenes]

nicely put Tim

Milan.

[Euro-commuter]

The taxation schemes.

In both cases the capital gain on your own property is taxed (in Germany for properties owned less than 10 years). Thus, it is (almost) impossible to buy your way up the market as we do in the UK.

As no-one wants to live with their family in the house that they can afford to buy as a single person, they are forced to rent until they are in a position to buy the house that they aspire to. This will often be the only one that they ever own.

(Italians are the same, many of which spend their working years renting in the city, whilst buying the house in the country that they expect to retire to).

tim

While it is true that many French people do the same (rent in the city where they work, buy in the country where they expect to retire), the reasons must be different: there is no CGT on the sale of a property that is your primary residence at the time of sale.

But buying and selling is more difficult and expensive, which tends to make people buy only when, or where, they intend to settle.

There is probably something self-reinforcing in the habits on both sides of the Channel: the fact that it is normal to rent in France leads to a healthy rental market, by which I don't mean a lot of greedy BTL, but rather a large supply of good rental properties everywhere, with secure long-term tenancy agreements available. You can rent a flat in Paris and feel that it is your home: which you can hardly do here with 6-month no-security tenancies with rules everywhere (can't smoke, or allow your friends to smoke, in your own home?) and regular snooping visits from the landlord. I'm buying a house in the UK at the moment, more because the situation of a tenant is degrading and unhappy, than because I believe it is a good investment.

[Numptycorner]

Buy now while they are at bargain prices. The only way is up the average house price will be 1/2 million by 2010 and wages 40k a year, 3k a month repayments, leaves -500 per month disposable income. I can see it now, the new overdraft mortgage. With economics like that house price inflation will go on forever , you can't fail.