Sunday, 5 October 2014

Low rents

by government fiat. You don't have to be a genius to figure out that this one is a bad idea. At least, if you had a first college class in economics.

Turns out that in Germany, the easy stuff is still too hard for the political class. Having successfully destroyed the market in housing by freezing rents on old contracts, they are now extending this to new ones... because the new contracts are going up at something approaching the rate of inflation. You couldn't make it up. I can think of no rich, industrialized country in which quality housing is as cheap as in Germany - either to buy or to rent. What will the future bring? In a small piece for the FAZ, I look at the historical experience in Spain and the US.

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