House, Apartment, Studio, Room... Street? .:. Late Night Blogging
I have to vent out my real estate market frustrations somewhere, and there is no better place than HIVE, where real people share real views, and discuss openly about problems and issues... It's a bit ironic, but I do prefer a more real image, with all the good and bad, than the fake image shared on other social media where everyone has a perfect life, and everyone is happy with the state of life (and society)...
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As usual, just to clarify 2 important things... What I will share in this post are my personal views, and I will drop some numbers that are valid in my surroundings, part of Spain where I live... These numbers can be completely different for you, even if you live in the same country as me... But, what is probably the same (I hope you will share in the comment section and we can compare), is the trend and direction in which we are moving...
The second thing that I want to clarify is that I'm extremely happy with my decision last year to finally buy a property and to "secure" a roof over the head for my family! I'm not sure that something like that will be possible to do even today, and can't even imagine in a couple of years...
Why the rant then? I have maybe mentioned a year ago something about my son continuing his schooling in Valencia and searching for a room to stay in... Almost one year has passed, and he decided to move from that apartment and rent another one... Why? Well, the room that he was renting was old, poorly isolated, situated in a very old building/apartment, and it was well overpriced!
Let's talk numbers, moneywise and timewise... I remember mentioning the real estate prices multiple times in the past, and recently, I did it again on the #HHHLive show... I mentioned the story of my father earning enough money working for two months to buy a house in the late 70'ies... And, he wasn't an isolated case... Many people did that in those times! Try to replicate that today...
Fast forward into recent personal history... I remember when I moved to Spain 13 years ago, and the search for an apartment for my family... As we have just one friend there, we decided to keep him close, and we rented the first apartment on the same street! Unfortunately, the whole town was a popular tourist place for wealthy people, and the initial price was already too high...
To be more exact, the evolution of the renting price for a 2-bed apartment was from 450 EUR to 800 EUR (all that in only 13 years)... The price has doubled in just a decade! We are talking about the country where the average salary is around 2K EUR, but it depends a lot on the place where you live, industry, experience, etc. For example, supermarket workers have around 1K per month... That should be enough for you to see how it's impossible to live and rent without working more than 1 job!
As my son was searching to rent a room, I checked out that market too... Oh, boy... What can you find there? It is cheaper than an apartment (obviously), but not that cheap... Also, the idea of renting rooms was most popular among students, but times are changing... For example, the room (400 EUR per month) which we checked a few days ago was in the 4-bedroom apartment, where other tenants weren't students, but rather people in their 30s, who work... I don't know about you, but when I was finishing school, I didn't imagine living in a rented room in my 30s or 40s! I doubt that those people live like that because they want to, but rather because they can't afford better!
I just want to reflect on the WHOLE apartment where my son was renting... It was a 5-bedroom apartment, in a 60-70 year old building, which hadn't been renovated for over 2-3 decades, and his room was the cheapest... Long story short, the landlord has invested almost 0 EUR in it, but it's renting the whole apartment for over 2K EUR per month!
I know, it is maybe even more expensive at your place... But let's try to keep our focus on direction...
The thing gets even messier if we think about retired people... Now, imagine yourself in 30-40-50 years, when you reach your retirement... If you didn't buy your home, and you didn't have stable work during your life, you will probably receive less than 1K EUR pension (sometimes a lot less)! How the heck can you decently live with that money? By renting a room in a shared apartment?
I don't know where all this will lead us, but it doesn't look good at the moment... It's getting impossible for young people to even think about buying their home, and as time passes by, it's getting more and more difficult to do it...
If there were no cryptocurrencies, I wouldn't have my roof over my head... That's probably the biggest motivation that I can get whenever I have doubts in crypto... It was worth it, and it is worth doing it... Spreading the word about it, helping others on the way, and accumulating tokens that are more valuable than soon-to-be-worthless fiat money!
Thank you for your time.
--ph--
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It's pretty shocking to find out that even a simple room in an old building can run you about 400 EUR a month, when considering the condition of the property and how little landlords invest in it.
It's all about offer and demand... Unfortunately for people who LIVE in those cities, there is a big demand from tourists who push the price up... Eventually, tourists will leave, but also the workers and those who live will also abandon the city, searching for cheaper long-term accommodation...
Who knows, maybe that's actually good and we will see migration back to small towns and villages... But, in the short term, it will create a lot more poverty, that's for sure...
Hey! That is Alicante! I stayed in the Melia Hotel on the pier a couple of times when I was in Alicante for work.
Finding a houde is a problem in the Netherlands as well. There aren't enough houses. The government 'forces' elderly people to stay in their houses as long as possible.
The environmental regulations prevent that the needed amount of houses can be built.
People are overbidding on houses like crazy. Bidding 650k more for a 600k house often isn't even enough to have the highest bid. And how can starters get a loan for a 650k house? The market is completely stuck.
Because it's very difficult for people to get a house, renting houses becomes more popular, which also increases the average rent.
I'm really curious if we will get out of this impasse because I do want my kids to be able to be able to live on their own in a couple of years.
But maybe when Hive goes 10x I can support them a bit with my crypto then 😀
Hehehehe... You recognized it well... It's Alicante photographed from the Santa Barbara Castle... 😃 But, in the post I was writing more about Valencia, as my son is going to the University there...
I wouldn't imagine telling this, but it's actually not a bad push by the government... If elderly people didn't have their own home, it could be much worse...
It's hard to live with parents when you are an adult... It could sound nice moneywise, but it's not good for anyone...
Elderly people used to go to a retirement home at a certain age. But now they are encouraged to stay in their 4 bedroom houses. Here in our neighborhood we have a lot of large houses being occupied by 1 or 2 elderly persons, sometimes far into their nineties that would have been better off in a retirement home.
Don't get me wrong; they fully deserve to live there. It's their house.
But if they stay in their houses, the new families can't go from their small appartements to a big house and the appartements will not be available for starters.
There just is no flow at the moment.
Retirement homes are a good option for those who want to live there, but there should be a choice too... Also, if those homes are affordable to everyone, that's not a bad scenario that you said... If not, I wouldn't be in the skin of a retired person who sold their house and can't pay a retirement home anymore...
You mentioned regulations keeping the market stuck... I would rather go in that direction to solve the issue, as blaming older people isn't a good way to do things... We will be old one day too... and maybe not willing to go to the retirement home... 😃
After deeper research, I found the information that 30% of Spanish banks' portfolio is in real estate... I think that we know who to blame for the "price bubble" here in Spain, as they don't put their real estate on sale... That's a lot of "locked" homes, which could host many citizens...
All in all, I do believe it's an artificial bubble created by banks and big investors... Controlling the offer, they push the price up...
Oh, I don't blame the elderly. There are just no sufficient places for them to move into, so even if they want to move, they can't.
It's just a continuous loop in which we are spinning... running like a hamster on the wheel...
🎉🎉🥳 Congratulations 🥳🎊🎊
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keep up the good work
Intresting topic ...
Here in Holland students are facing the same problems for as long as i can remember.
Owning a house these days if you want to buy something you have to bring +/- 450.000 in Euro's , 75% of the people can't get a mortage for that these days .
and the government is strugeling with building new houses small country , CO2 laws , environments issues and on top of that if they finally build something you have to wait and see if you get electricity or not , since the power network is exhausted due to lack of investments.
I'm a happy renter caugh caugh paying +/- 1000,- euros a month , but we can't get a mortage due to our age and health .
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Good to hear that you are a happy renter and that you can afford to pay your rent! I hope you will never have an issue with that! My uncle lives in Germany and he has been renting for all his life, which is fine if you can do it... Unfortunately, not all countries are like that, and not everyone has the luck to have a stable job and decent pension...
well that is only after the bank forced us to sell our house back in 2009 - 2010 , at the worst possible moment in time when the market dropped . but we made it through and are still breathing and together.
I have a Dutch friend here in Spain who had a very similar story to yours... Bought a house just before the crisis, at the top of the price bubble... Unfortunately, the man got sick and couldn't run his company, the monthly rate was too high to pay, and the bank took their house... They are living in a rented apartment and still pushing forward!
Hi Ph! Wow, what an interesting topic. As you know, I'm from Venezuela, and to put it mildly, the direction you're talking about could lead the economy in 10 or 20 years is already happening here. That is, we're living in that dystopian future you fear. My salary is $130 a month, so you can imagine I don't own a house. This is a wave that will sooner or later reach the Global North. Those of us who live here in the Global South are suffering from what I call a "dark forest attack." That is, global financial power will never allow us to develop. All countries in the Global South are suffering from sharp currency devaluations, and this isn't a consequence of the decisions of our leaders. The point is that we need a context of global peace, and as long as we have wars across the globe and our international reserves remain in dollars (or "bills of shame," as I like to call them), we are simply plowing the sea. The solution is not easy, not at all, and even less so now that we are in this phase of turbo-capitalist madness. But I do reaffirm your last thoughts. The way out lies in the crypto ecosystem. It's a narrow and very narrow possibility, but it's there, and we must take advantage of it. Best regards.
!BBH
When I was talking with @jesuslnrs when he visited Spain, I had an opposite opinion that you just wrote, but in some way, bot views can be true... I lived in former Yugoslavia, when we had civil war, when Serbia had sanctions, when it was bombarded, when we had a dictator in the country... It was very similar to what was (maybe it is still) happening in Venezuela... It was amazing to listen to Jesus describing almost exactly what was happening in Serbia 30 years ago!
It got better in Serbia, and it can be better in Venezuela too, but you are also right about what you wrote in continuation... Creating wars all over the world is just spreading fear and uncertainty among people... In those moments, everyone runs into "safety", which is presented like USD, the USA, or some other big country, forgetting about the local economy, local values, etc. And without the support of the small, local man, you can't thrive and grow...
Don't know the solution, but I know that we should stick to each other... Helping as much as we can... The politicians, banks, and rulers will find their way... We don't need to waste money on them... 🙂
Housing costs are ridiculous here too. I'm happy I own my home, but even so with taxes and maintenance it is a struggle on my retirement income. My grandkids require help from their parents for housing.
"Ridiculous" is probably the best word to describe what's happening in the real estate market...
That's what saddens me the most... Instead of kids helping parents when they grow up, they are still dependent on them... 😔
Things look bleak for youngsters when you think how much debt they need to take on to get a roof over their head. Its hard to know if we will ever see the demonetisation of most real estate like before 1971 or an end to landlording where people think buy2let is a business, when they are just middle men stopping people getting a basic necessity the majority of the time.
Speaking of debt... I was watching a short video from an American guy who moved to the Balkans, where he was explaining the connection between health insurance and the military in the USA... Long story short, he was talking about debt and how young people get enslaved early by taking student loans, and the rest is just adding on top of it... Car loans, health insurance costs, etc... and on top of that, house mortgage (for many it's not even possible)...
I don't see that happening... It is a basic necessity, but I'm not sure there is the will to make it "fair"... It would go against capitalism, and you can't doubt in capitalism... 😃
I tend to agree, people are addicted at this stage to this cheap money. Fiat is going to be around for some time yet.
Whilst the environment is bleak for youngsters, hopefully, if they are not completely brainwashed, there are still many huge opportunities out there for the taking and GenX didn't have Bitcoin back then either, so maybe they can do even better.
There is some encouraging news coming from the GenZ cohort... It looks like having no trust in banks at all, so maybe there is a chance for them... 🤣
That's a good start I guess 💪😅
The reality unknown to those of us who live in other places. Every day I dream of emigrating to Spain, but when we hear real stories like this one, things take on a different nuance. In Cuba the housing situation is something out of this world.... a reality so strange that it seems unbelievable. I could not talk about rental prices because I do not know that market right now. We were 9 years renting from 2001 to 2010, we paid from 50 USD per month for an apartment. Very cheap you could say, but believe me, it was not. Back then, 1 USD was equivalent to 25 Cuban pesos. I had a salary of 510 Cuban pesos and my husband 420, per month, and we paid 1250 in rent!!! Simple math, to live, we had many extra jobs. Today the rent issue must be worse. In 2010 we bought a 50m2 apt for 12k USD which was about 300k Cuban pesos, for us a bundle that took us 10 years to put together. Luckily we made it back then. Today this apt is still at the same price, maybe about 2k less, but right now 10k USD represents 3 800 000 Cuban pesos!!!!! And the minimum wage does not exceed a measly 8 USD per month!!! Inflation is devouring us. Saludos.
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Sorry for "killing your dream", but to correct myself, it's not like that in EVERY part of Spain... The direction is similar, but the numbers are maybe lower...
I hope you had your mortgage (or loan) indexed in pesos, as I suppose having it in USD would be devastating... I lived in a country that had a huge hyperinflation for a couple of years, but luckily, it was stopped and slowed down... Inflation is a huge problem, and it is destroying families and lives... Prices are going up, and wages continue to be the same... Every month, you can buy fewer and afford fewer things/food...
I hope things will change for the better... Modest people don't ask for yachts, big houses... just for a decent life...
Sorry, I forgot to tell you about the most remarkable peculiarity of the real estate sales and purchases in Cuba. Here there are no mortgages, the price of the houses is paid in full in a single payment, cash, money in hand, no bank transfers (these are things that even we do not understand, they are so absurd that it is impossible to explain 🤣) No matter the price (there are from a few thousand USD to 1 million or more) you have to pay everything. And the best thing is that they are sold 😆. Saludos.
Then it's even more impressive how you managed to buy your home!
Congratulations!
Thank you 🙂, it was many years working towards that. It is not the house we would like to have, nor the neighborhood, but it is ours. Many here have achieved it with the same or more effort, it is something that has always been very difficult. The housing problem is one of the most complex in our country.
We had the same reasoning when we bought our apartment... It is not a "dream house", but we stopped the "rent leakage" and finally got our own home... Now, we have many more possibilities to build upon it... Maybe to sell it one day and buy something else... However, if we didn't do it, we wouldn't be able to buy it in the future, as we would spend all our savings on rent.
Step by step... ;)
It is exactly like this, it is done here in our city too and such beautiful pictures and buildings are shown and it is said that in a few years it will change like this and people invest there but even after a long time that place cannot be restored and people's money is wasted and people start living their lives in a lot of misery again.
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What you say about the place where your son would be staying is terrible, a real abuse, so I can only say that you made the right decision and it seems that it was also at the right time. I think a lot about students, retirees, and even new immigrants; there is a long way to go, but everything in life requires a lot of effort. I met you recently and I know it's been a long road, but you've made good decisions and now it's time to enjoy yourselves and continue building for the future, perhaps a little more calmly. I wish you all the best and I sincerely hope that our next coffee date will be at your beautiful new home 🙏 ¡Un gran abrazo para ti mi hermano! ❤️
You listed the most vulnerable types of people... Those groups have to make a double effort than others, which is a huge disadvantage at the start... Knowing that even people who have stable and well-paid jobs are struggling, imagine those who have no job, starting their life, or living on a small pension...
The time is running out, and the best thing that we can do is to think about ourselves and our closest ones, try to "secure" our tomorrow, and make it at least a bit certain that it is... While we can...
800 euros for a 2 bed rooms apartment actually is a good price, it will get rented within days here
400 euro for a room for a student is the standard price here
Yea buying house is a pain in the ass it's super expensive now, I've read an article where it's written that the only way for youths to buy a house now is that if parents help them
Well, it gets rented within hours here for that price too, but that wasn't the point of the post... Those who can afford it will rent it (mostly expats here in Spain), but many locals can't afford it...
That is very sad to see... It looks like society is forcing young people to be dependent not just on banks and institutions, but also on parents until a very late age... It should be the other way around... Kids to help parents when they are retired! ☹️
Yeah, that how it should be, instead we are going the opposite side... Of all my colleagues, who has his own home, 1 bought by parents and 1 had terrain given by parents and building company was of his uncle so he saved a lot... A new apartment in the peripherals 280k€ that's madness
Times are rough, but I do agree that times have changed. It reminds me of how people are all saying that the middle class is dying out as people don't earn nearly enough.
When the middle class is a minority, the society is sick and with no chance of continuing on the same path... The middle class is/was the biggest contributor to society and the country's...
I think the trend is similar across the world. Young people are screwed if we strictly try to adhere to the old model of getting just a traditional job, then save enough to buy a house and start a family.
That dream is more or less dead, the structure has changed fundamentally partly thanks to depreciative value of money.
What I sometimes find more interesting is that most of these goods/services and properties that we buy nowadays aren't much better than their old incarnations decades ago. Sometimes they're much worse and we're still indirectly forced to purchase them!
I'm also grateful that there are alternatives like crypto that exist and give a glimmer of hope to build a better life with more flexibility according to one's terms.
Tbh, I liked that model and it looked like a good and healthy way of living... But, I do agree that the model isn't valid anymore... Sometimes, it looks like it has been destroyed on purpose... The "institution" of family, having your home, your children... All that is depreciated recently... 😞
When you travel around Europe and check some of the old buildings, churches, and castles, you can see buildings that are 500-600, or a millennium old, and they are still standing!!! I can't imagine any residential building built in the last 20-30 years, standing more than 70-80 years!
It does indeed look like this destruction was done on purpose, classic division strategy, people have become more individualistic as a byproduct which has come at the cost of the community.
Right. I sometimes think on this strategy of buying those old buildings that have existed for centuries, no matter how expensive the price may seem. Because this newer buildings have no solid substance, like vaporware :)
Just as others mentioned, it's echoing the same all over the world. The concern remains the same, it's getting harder for younger people to ever own a house or start a family.
There are outliers for sure and from what I normally hearing, older people don't really believe this problem exist. On top of that, unfortunately, there are the same people who also sit as policy makers that somehow still aren't even willing to recognize this problem exist in the first place. Many young people all over are also try to migrate but honestly, every country is messed up. It's really is just pick the poison and deal with it.
Where I am from, even rent itself is almost like 50% of our income. It's crazy 😅
That's the real issue... The real estate problem is just the beginning of the cascading issues that follow it... Like you said, when you have no home, you are uncertain about the future... If you can't secure a roof over your head for yourself, you don't have the self-esteem to even think about starting a family... And a healthy family is a pillar of a healthy society...
That was the main reason for writing this post... To get the feedback from others all around the world... What I suspected proved to be true, and that's that things are messed up everywhere... Somewhere more, somewhere less...
That's crazy... Look at @mdrguez's comment... that's even crazier!
Great post. I mean, I was talking about how you ended it. It was easier for people in the 80s to work and comfortably own their houses, but it's almost impossible nowadays, why? People can no longer earn as much money, and the prices of rent has increased. It's crazy for house that hasn't been renovated in 3 decades to go for 2k£,I mean I'm sure they're are faulty things in the house, maybe a broken faucet or a damaged bathroom and something of that sort.
As you've said, if not for crypto, I'll also be homeless as well.
That's how inflation works and that's how these financial gurus solve the financial problems... Print money, cover they asses, and buy valuable things with worthless paper that poor and middle class need for every day life...
Actually, we should just follow that pattern... and I suppose some of us did that.. Buying valuable crypto instead of buying stuff that has no value...
Whenever my friends tell me how much property prices have risen, I try to be "funny" and tell them they should price the unit in BTC, and it's quite mind-blowing that actually the price has actually "fallen". :P
!LUV
That's true... The price in BTC went down... Unfortunately, I don't have enough BTC to buy a home, but who knows... Maybe one day it will be enough... 😃