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The listed company Deutsche Wohnen announced at the weekend that it would limit future rent increases in such a way that a household would have to spend a maximum of 30 percent of its net income on the net cold rent of an appropriate living space.
Wild emphasized that many tenants did not want to constantly disclose their income to landlords and that the concept would therefore probably not be used in such cases. It is not a substitute for the planned Berlin rent cap and is also not an overall solution for the rent increase.
The German Tenants’ Association said that there have been no comparable announcements from other real estate groups to date about the advance by Deutsche Wohnen. You could – according to the assessment – take the promise as an example.
Last week, the red-red-green Senate in Berlin had decided on key points for a draft law to stop rent increases in the capital. The aim of the law is to ensure that rents in Berlin do not rise for five years. Deutsche Wohnen has a large part of its Germany-wide portfolio in the capital. Berlin would be the first federal state in Germany with such a rent cap.
Ten years after the real estate bubble burst in the US, many American homeowners are still threatened with foreclosure. This makes them easy victims of scammers. Raymond Murray also lost his home.
Raymond Murray got the call when he was feeling really bad. His wife had died, he was unable to work due to several accidents, and he had scraped the last of his money for a lawyer to avert the impending foreclosure sale on his modest Brooklyn home. The man on the phone’s offer seemed like a gift from God: avoidance of the auction, no legal fees, and debt rescheduling at lower rates.
A little later, Murray was sitting in the caller’s office, making the deal perfect that he was hoping to be able to stay with at his house. But it wasn’t long before he realized that he had been betrayed of his place to live. Since then, Murray’s lawyers have been fighting to get the 67-year-old back to officially own the house. Murray himself now knows why he was targeted by the criminals. “You noticed that I was desperate and needed help”.
In the USA, more and more homeowners are falling victim to this or similar scams. With lies and false promises, criminals trick desperate homeowners threatened with foreclosure into giving their properties over to them. In the end there is homelessness – or at least years of litigation.
“The scammers are no longer content with stealing $ 5,000. They want the whole house now,” said Dina Levy, who heads the New York attorney general’s homeowner protection program. There are cases from all over the country. But nowhere is the problem as great as in the residential areas of New York.example of community service essay
The New York Sheriff’s office took control of the cases in 2014. Since then, more than 1,700 complaints have arisen, and hundreds of cases are being investigated. So far 32 people have been arrested.
Murray came to New York in 1989 from Guyana, South America. He worked as a telephone technician and later as a traffic cop. At first he lived with relatives with his wife Desrie, a teacher. Later they rented a house. After all, they had saved enough to buy a property: a modest two-story brick house with a white metal gate on a quiet avenue in Brooklyn. He was proud – felt that it was the reward for his work. “It was the American dream,” says the 67-year-old.
After two accidents at work, he had to retire. Money was getting scarcer. Then, in early 2009, his wife suddenly died of ovarian cancer. Murray restricted himself more and more, rationed his groceries, turned off the lights to save electricity. But the savings became less and less. He was in default. Then came the threat of foreclosure. Murray hired a lawyer and paid him $ 5,000 to reschedule the mortgage. Then in January 2014 that fateful phone call came.
The man had promised to rescue him at no additional cost. Because of his bad credit, Murray had to transfer the house to his company for 90 days so that the debt rescheduling could be carried out, it said. Murray signed a pile of documents. He left the office relieved. But a few days later the man called him and told him that the debt rescheduling had not been approved. Please be patient.
Murray grew increasingly concerned and suspicious. Suddenly his supposed savior was no longer available. Then he met a man on his property who was taking photos and claiming that he now owned the house. Shortly afterwards, the eviction notice was posted on his door. It was finally clear to him: “My house was stolen from me.”
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The 67-year-old thought he was going to sign a debt restructuring, but it was actually a sales contract. Since then, lawyers have been fighting over his personal American dream. The procedure has not yet been decided. But Murray was allowed to stay in the house for the time being – even though it no longer belongs to him on paper.
The current real estate prices are far too high in Germany. Many experts, such as Commerzbank, agree. Nevertheless, the hype is likely to continue – unless politics changes a decisive factor.
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The prices for residential real estate in Germany are rising rapidly. In Commerzbank’s opinion, there are now increasing signs that the real estate market has ended its catch-up phase and could now tend to exaggerate.
The Commerzbankers list the reasons for this in detail: On the one hand, the relationship between house prices and incomes in the big cities has literally exploded. In the five largest cities in Germany, house prices have even risen almost a third faster than the incomes of residents. “Even without a long-term historical comparison, there is no question that the real estate market in the metropolitan areas shows clear exaggerations,” says Marco Wagner, author of the Commerzbank study.
Further figures from the market research company Empirica show that housing prices in Munich are furthest away from income. Last year, households there had to pay an average of 7.6 times their local average annual income for a well-equipped 80 square meter apartment – an increase of more than half.
Economists also expect that the affordability of housing will decrease further as a result of the European Central Bank’s program to purchase government bonds for more than 1.1 trillion euros. “After the ECB’s decision and the elections in Greece, prices are increasing again,” said Andreas Schulten, director of the real estate market analysis firm Bulwien-Gesa, to the “Handelsblatt”.
As a second indicator, Commerzbank looked at the relationship between house prices and rents. In the past five years, the prices for buying a property have risen much faster than renting them – and are likely to continue to rise. “This rapid increase indicates that exaggerations are developing in the housing market, especially in German metropolitan areas,” the study says.
The third point: The greater indebtedness in mortgage loans. With reference to data from the Bundesbank, Commerzbank writes that these loans have recently increased by four percent – and thus stronger than the income of private households, which was able to increase by three percent. The trend towards an increasing debt ratio has thus continued.
Other experts such as Ulrich Stephan, chief investment strategist for private and corporate clients at Deutsche Bank, on the other hand, do not believe that the credit volume has risen so much that one can speak of a real estate bubble. “All of this is put into perspective with a view to Europe: When it comes to real estate prices in major European cities, Munich ranks 15th and Frankfurt 51st,” said Stephan at the “Handelsblatt” capital market forum in Wuppertal in mid-December of last year.
The good news, at least for property owners: According to Commerzbank, the hype about concrete gold will continue. The driving factor for this is the high level of immigration. Net immigration is likely to have swelled to over a million people in 2015 – and there is no sign of it dropping. “Should the flow of refugees decrease significantly, however, the hype on the real estate market could quickly end,” warns Marco Wagner from Commerzbank.
In a study, the Institut der Deutschen Wirtschaft estimates that just through the influx of asylum seekers – in the most likely scenario – a little more than 100,000 additional apartments would have to be built per year by 2020. According to the study, fewer apartments have been built than demanded in recent years.
The other reasons for further increases in real estate prices are positive economic prospects and the ongoing flood of liquidity from the European Central Bank. Wagner’s conclusion: “The real estate boom will continue, but the risks for the German housing market and the German economy are increasing.”
The European Central Bank has practically abolished the key interest rate. The fight against mini-inflation, however, could not be without consequences. Economists are worried about the side effects of ultra-cheap money.
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Commerzbank chief economist Jörg Krämer warns of a real estate bubble in Germany as a result of the cheap money glut from the European Central Bank (ECB). “Real estate prices are not yet out of hand if you compare them with the achievable rents, disposable income and debt servicing,” said Krämer.