Housing Crisis

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Hungary Dsy
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Housing Crisis

Post by Dsy »

I think its currently the most important topic in the EU (also probably in US as well - but people from there can comment).
What do you think of the current Housing prices in your country? Is it in crisis? Was it better in the past?
What do you think of housing overall? What do you think about homeless situation in your country - are there many? How easy to get a new house? etc...

I can start:
I googled a 2 room - a bit minimalistic but solid - 52 m^2 apartment in Budapest. It costs 50 000 €.
Renting a same quality apartment costs 350 € a month.
A median worker earns here probably around 600 € a month.

I think house prices are very high here. What about your country/city?
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Netherlands Mr_Bramboy
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Re: Housing Crisis

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Post by Mr_Bramboy »

€50.000? I'm booking a plane ticket.
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Re: Housing Crisis

Post by Astaroth »

It's the same in most popular big European cities. Housing prices eg in Paris, London and also Munich are crazy.
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

Housing prices are always high, except during major financial crises when they drop a little. Then they go back to the previous high levels after the crisis subsides.

It's one of the most dysfunctional markets. If there's an example in which the free market doesn't work, it's the housing market. Why am I saying that? Because houses are not a kind of asset that depreciates easily, so owners can hold and hoard them indefinitely, until someone buys. It's a sellers' and speculators' market pretty much close to 100%, the supply and demand rules that the free market cultists keep peddling don't work at all, prices only go down when a financial crisis is so dire that even those few people who could still commit to getting a new house through various financing schemes are completely deterred.

50000€ will not get you much here in a big city, maybe some poor studio in a terrible neighbourhood. You could get an OK flat in a smaller city, but not a downtown one for sure. You'd still have to get something in a more modest area. Rents are also quite high relative to income levels, but that's the case all over Europe.

That's why this idea that we need to make sure we have growing demographics (ie, birth rates above replacement level, so >2.1 children/family) for the sake of keeping the GDP growing is bad, when that means making the housing situation an even bigger hell for a growing number of people.
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Kiribati princeofcarthage
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Re: Housing Crisis

Post by princeofcarthage »

You are considering the lowest possible income. In most countries average lowest (edited) cost of 1 BHK is about 100-150 times the lowest income in the costliest city in the country, while that drops to 10-15 times in an urban area but not village. In village it further drops to 1-6 times. But the real demand comes from low-medium wealth to ultra rich households. People you mention never buy house in most cases anyways.
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Re: Housing Crisis

Post by RefluxSemantic »

1000-1200 rent for 60 m2 here. Apperantly appartments sell for €5000/m2. Its insane. I feel pretty desparate tbh
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Re: Housing Crisis

Post by Dolan »

@princeofcarthage
I don't think you should extrapolate the situation from India to other places in the world, because your country has the largest population in the world and one of the highest population density levels. And a very high level of poverty.

That's not comparable to Europe, which also has high density overall, but population is just above half that of India for the entire continent.
If we only take into account EU countries, we have one third of India's population, but living within an area that is more than 1 million square kilometers larger. And much lower poverty levels than India overall.

Here, in the capital, the average price for a flat is €80000 and the average wage is about €800. So the price of an average flat in the capital is 100 times the average wage. It would take more than 8 years to save an entire average wage to be able to buy at the average price. So you have to look for a financing scheme, which involves having an initial deposit of about 30% of the total price. And if you can afford that, you'd have to pay a mortgage for about 30 years. If you happen to lose your job and fall behind on payments, you lose the house and at best you recover your initial deposit, at least partially.
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Kiribati princeofcarthage
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Re: Housing Crisis

Post by princeofcarthage »

So I also said about 100 times?
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

You said 100-150 times the lowest income.
And here it's more like 100 times the average income.
Can you spot the difference.
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Kiribati princeofcarthage
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Re: Housing Crisis

Post by princeofcarthage »

But I am comparing lowest income to lowest 1 bhk in city proper. You are doing for average to average. Kinda similar
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

What is even the lowest income. Street begging?
Makes no sense to use it as a term of comparison for anything.
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Hungary Dsy
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Re: Housing Crisis

Post by Dsy »

Dolan wrote: That's why this idea that we need to make sure we have growing demographics (ie, birth rates above replacement level, so >2.1 children/family) for the sake of keeping the GDP growing is bad, when that means making the housing situation an even bigger hell for a growing number of people.
Its actually really strange. I have checked Budapest population and it is in decline since 2015. Smaller cities and villages probably in much bigger decline.
And house prices even in smaller villages are very inflated.
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

Could be because the supply is still larger than whatever demand there still is on the market. Meaning there's still a lot of population that still doesn't own their flat/house, even if overall the population is shrinking.
So there's still room to speculate and ask for higher prices. Especially if there aren't enough housing projects on the ground.
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Latvia harcha
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Re: Housing Crisis

Post by harcha »

I don't think i'll ever own an apartment here, and I earn 1.6x median.
POC wrote:Also I most likely know a whole lot more than you.
POC wrote:Also as an objective third party, and near 100% accuracy of giving correct information, I would say my opinions are more reliable than yours.
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Hungary Dsy
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Re: Housing Crisis

Post by Dsy »

Dolan wrote:Could be because the supply is still larger than whatever demand there still is on the market. Meaning there's still a lot of population that still doesn't own their flat/house, even if overall the population is shrinking.
So there's still room to speculate and ask for higher prices. Especially if there aren't enough housing projects on the ground.
So it can be also an interesting data.
There is 924k housing in Budapest for a population of 1,75m. But due to covid population probably went down a lot (since these data from 2019).
Overall trend in the country that for 1 housing there is 2 people.

What is the situation in Romania?
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Re: Housing Crisis

Post by RefluxSemantic »

harcha wrote:I don't think i'll ever own an apartment here, and I earn 1.6x median.
Shouldnt that easily be enough for a 200k mortgage?
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Re: Housing Crisis

Post by princeofcarthage »

Dolan wrote:What is even the lowest income. Street begging?
Makes no sense to use it as a term of comparison for anything.
What unskilled labours earn for doing a day job. Its roughly 8k inr per month. What is the lowest you would earn if you had a full time job? (Job not contract)
Fine line to something great is a strange change.
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Latvia harcha
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Re: Housing Crisis

Post by harcha »

@RefluxSemantic
lmw.png
The bank offers me 90k mortgage max atm. If i was to marry it would probably be less. At this price you can find small new apartments here but the monthly payments will be quite high. This option just doesn't make much sense to me. And the longer I won't buy anything the more ridiculous the prices will get.
POC wrote:Also I most likely know a whole lot more than you.
POC wrote:Also as an objective third party, and near 100% accuracy of giving correct information, I would say my opinions are more reliable than yours.
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Re: Housing Crisis

Post by princeofcarthage »

You are earning about 1350
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

Dsy wrote:So it can be also an interesting data.
There is 924k housing in Budapest for a population of 1,75m. But due to covid population probably went down a lot (since these data from 2019).
Overall trend in the country that for 1 housing there is 2 people.

What is the situation in Romania?
It's hard to get a clear picture of the housing situation in Romania, because when a polling institute asks people whether they own their house, they could be living with their parents and they might tick the box "Yes".
Official stats tell me there were 9.1 million homes in 2019 covering a population of about 19.3 national residents (excluding those working and living abroad).
In 2019, 67488 new homes were built. I can't find any recent data on how many individuals/room there are, the last stat is from 2006 and it says there were about 1/room.
The population in Romania is shrinking, but that's also the case because 2-3 million Romanians are living abroad, mostly younger people.
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Re: Housing Crisis

Post by RefluxSemantic »

harcha wrote:@RefluxSemantic
lmw.png
The bank offers me 90k mortgage max atm. If i was to marry it would probably be less. At this price you can find small new apartments here but the monthly payments will be quite high. This option just doesn't make much sense to me. And the longer I won't buy anything the more ridiculous the prices will get.
Sorry for some reason I thought you were german
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Nauru Dolan
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Re: Housing Crisis

Post by Dolan »

princeofcarthage wrote:
Dolan wrote:What is even the lowest income. Street begging?
Makes no sense to use it as a term of comparison for anything.
What unskilled labours earn for doing a day job. Its roughly 8k inr per month. What is the lowest you would earn if you had a full time job? (Job not contract)
The lowest would be the national minimum wage, 343 USD = 24896 INR.
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Re: Housing Crisis

Post by princeofcarthage »

Dolan wrote:
princeofcarthage wrote:
Dolan wrote:What is even the lowest income. Street begging?
Makes no sense to use it as a term of comparison for anything.
What unskilled labours earn for doing a day job. Its roughly 8k inr per month. What is the lowest you would earn if you had a full time job? (Job not contract)
The lowest would be the national minimum wage, 343 USD = 24896 INR.
And what would be the cost of 1bhk in city proper
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Re: Housing Crisis

Post by duckzilla »

I think that a general problem of the housing market is that (generalizing a bit) everyone would like to have a large single family house with a garden well connected to the city center of the capital, but the available space is very limited.

I live in an average German city in the Ruhr Area and actually happened to buy the apartment that my wife, daughter and I live in last January. We already rented this very same apartment for the last six years and, hence, know how much rent you would expect here. The apartment is relatively close to the city center. We have a subway station in 30m walking distance and it is just two stations to the central station which is behind the city center from our point of view. Fairly well connected, we do not own a car and have all necessary things for daily life in walking distance (physicians/supermarkets/drug stores/multiple playgrounds/etc.). The apartment is 68m², has three rooms, two (tiny) bathrooms, and a (tiny) kitchen. We paid 95k € and got a loan via the Kreditanstalt für Wiederaufbau (German state-owned investment and development bank) that only has 0.84% interest, making interest payments 70€ per month. Before buying the house, we paid 680€ rent (including things like water and sewage, but without electricity/gas/internet).

From my experience, the housing market cannot be said to be in a state of crisis here. The average salary in my city should be somewhere close to 40k (or ~20k after tax/social security), resulting in a disposable income of ~2k per month. This should be enough for a rent of 680€ or even buying the apartment at a higher price than we did. In other words: if you think your housing market is shit, come and move to the Ruhr Area! It's a nice place with fantastic people, rich history (good and bad), and located in the heart of Europe.
Whatever is written above: this is no financial advice.

Beati pauperes spiritu.
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Re: Housing Crisis

Post by RefluxSemantic »

Maybe I am spoiled, but I don't really consider living in a 68 m² appartment with 3 people to be too great. I wish everyone could just have a normal house.

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