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Q: Another sign of bubble ?
Just today morning I have read an article in Czech e-newspapers, about the poorest and richest countries in EU measured by the property owning. There was an interesting fact, that the countries, which are dependend now on EU money helps and similar where the GDP is not big or even bad, have the richest families.
Like Cyprus, there is more than 90% of people living in their own houses and own several other properties. And we know theirs situation now. While in Germany, which is mean as a Leader of EU in many aspects and the one of the countries, who are donating money to countries like Spain,Greece and Cyprus, only 44% of theirs people are living in their own houses. By this measure it is mean, Germans are poor, as they no have many houses in their hands, but we know, they not that poor as is looks like here.
Than I was thinking about the situation here in China, where the people are rushing to buy as many houses they can get. Sure I know, that only small percentage of people here can buy it, but anyway I see some signs very similar ,of those countries who are now "baby-bottle-feeded" by the strong economies to survive some month, and here. It is the another sign, that the property bubble will be bigger than expected here ?
Not sure this proves anything in terms of bubbles. But it does speak to the fact that it does not save an economy if everyone owns their own home. Mind you, in most cases people who enter statistics as home owners are in fact not, their bank owns the properties.
Nessquick:
yes, specially here, most of the new home owners did just the 30% deposit and pay to the bank for 20 years.
I've lived in both Cyprus and Germany and the regulations and reasons governing property ownership are distinctly different. I lived in Cyprus in the late 80s and Germany in the 90s so these regulations and traditions may have changed but:
In Cyprus property ownership is used as a tax avoidance scheme, if your property isn't 'finished' it can be set aside against tax, that is why most properties have the reinforcing bars sticking out of flat roofs as they claim they are going to add another storey when their finances are up to it, so it isn't finished and hence they can use it for tax purposes. This leads to a very high property ownership percentage. Also you have a lot of expats who retire there as it has a nice climate and English is almost universally spoken.
Germany is different; a mortgage in Germany is usually over a 100 years so it is passed on to the children of the original mortgagee. What usually happens is the eldest will 'inherit' the property (and the mortgage) and extend it, by building a 'granny flat' (for the parents), often re-mortgaging in the process. This means a lot lower percentage of Germans actually own their own property as it is not unusual to have 3 or 4 generations living in the same extended property but only one owner.
