Financing comparison: past vs. today

2022-06-20 10:58:35

I find that very interesting, is that really the case? To be honest, I wasn't quite sure... Then I am no longer surprised how certain families can simply buy at very high prices. We have saved about 150k ourselves in our mid-30s and hardly have a chance to buy something (in our desired location)

Good morning,

yes, unfortunately that is the case... currently have a financing on the table, buying a house for 559 TEUR, but only need 250 TEUR financing... so 310k + additional costs as equity capital

in recent years, the volume of real estate transactions has increased significantly (that is the sum of notarized sales, including land etc.)
but the financing volumes have hardly increased = the equity ratio has increased well in recent years.

2022-06-20 11:01:20

Just for that reason alone, a 100% inheritance tax would be fair. Exemption amount, let’s say 10 average annual household incomes? However, the heir may decide that the tax alternatively goes to a charitable cause.

2022-06-20 11:01:23

I find that very interesting, is that really the case? To be honest, I wasn’t quite clear about that... Then I’m no longer surprised how certain families can simply buy at very high prices. We have saved about 150K ourselves in our mid-30s and barely have a chance to buy something (in our desired location)

It really is like that. There is still an incredible amount of money on the market that somehow wants to be invested. At the same time, even the most run-down shacks fetch more money when sold than ever before. That sometimes makes it easier for the heirs to emotionally detach from the parental home. Example from our circle of acquaintances: Grandma passed away in December at age 89. The city house in strong need of renovation has an estimated value of 150,000 euros, which was also achieved upon sale. The two heirs are about 60 years old. One passes his share directly on to his two children, giving each a direct 37,500-euro unplanned gift. It’s not a large sum, but the signal should be clear.

2022-06-20 11:01:45

I find it very interesting, is that really the case? To be honest, I wasn't quite sure... Then I'm no longer surprised how certain families can simply buy at very high prices. We have saved about 150K ourselves by our mid-30s and hardly have a chance to buy something (in our desired location)

I also always wonder who this heir generation is. I mean really: which current generation is meant? The 60-year-olds today? I know exactly one couple that age who built (without inheritance). Everyone else either already owns houses or likewise has no inheritance and rents. Or the 30-40-year-olds today whose grandparents left an inheritance? These are usually here (if at all) not cash amounts, but properties with renovation backlog. These are either renovated and used by themselves or sold, but since we are in the countryside here, then certainly not for half a million.

2022-06-20 11:03:51

They are either renovated and used by themselves or sold, but since we are in the countryside here, then definitely not for half a million by far

So until recently, the dilapidated 70s houses in rural areas were pretty much snatched up for ~400,000€. With rising interest rates, something is likely starting to change.

2022-06-20 11:07:10

It's actually true. There is still an incredible amount of money on the market that somehow wants to be invested. At the same time, even the biggest wrecks can be sold for more money than ever before. This sometimes makes it easier for the heirs to emotionally detach from the parental home.

Example from our circle of acquaintances: Grandma died in December at the age of 89. The city house, which is in need of major renovation, has an appraised value of 150,000 euros, which was also achieved upon sale. The two heirs are approximately 60 years old. One immediately passes his share on to his two children, effectively giving each 37,500 euros as an unplanned gift. It's not a large sum, but the signal should be clear.

Then it is almost certain that young buyers/families (up to 35 years old), even if they can save well, can never compete without an inheritance. That is really a shame and sad... Why haven't I lived it up in recent years :) ... ?!

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Financing comparison: past vs. today

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