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cobran20

Why stable prices in Germany

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the past 10 years, Germany has maintained a lower price level, nominal house prices in Germany rose only 1% per year, while the average price level in Germany rose 2%, that is after deducting the price factor, the actual price in Germany on the annual rate of 1% shrink. German house prices do not rise for 10 years, even before the financial crisis continues to maintain a stable situation. One of the most fundamental reason is that Germany's unique real estate policy.

First, the German government established a clear policy on housing benefit. German constitution stipulates that “Germany is a high-welfare state”, and health care, education, like the federal government to protect residential housing is one of the primary policy objectives. Thus, while the German government in particular, local governments control a large number of public land and housing, but no one dare not by raising the local land prices to increase local government's rent income or tax revenues.

Second, the German Government through the improvement of market mechanism and the effect of high real estate prices. Whether in federal or state, municipal and village level, have a detailed housing plan, housing construction, according to the population needs, and can basically meet the needs of each family have a home. Improve the housing rental market, in order to ensure the stability of prices in Germany played a great role in containment. Germany has strict rent law, issued a series of encouraging the construction of rental housing, protect tenants rights policy. Currently, Germany 42% owner-occupied housing, rental housing rate of 58%, 77% of young people are “renting family.” The German government also encourages self-help housing, cooperative housing, to break the monopoly of the housing developers. Cooperative housing currently accounts for the proportion of the total number of new homes each year more than 30%. German real estate appraisal independent of the Government, the assessor is only responsible for myself, and not by the government, and personal economic interests of the client, the market price of real estate depends on an independent real estate appraisal agencies.

Third, the German sound system to stabilize the price of credit provided to protect the financial system. Germany all have a fixed interest rate mortgage system, savings and mortgage rates lower than market interest rate is fixed, fixed-rate term commercial loans an average of 11 years and a half. This long-term mortgage interest rate cycle, almost any financial market volatility to contend, on the mortgage market plays the role of stabilizer.

Fourth, the German government's tax policy by severely inhibit the speculation. In Germany, for sale first to pay the assessed real estate value of 1% of the 1.5% real estate tax, housing transactions have to pay transaction tax of 3.5%. If a profit through the sale, must pay the price difference of 15% profit tax. These stringent tax system significantly reduces the real estate agency and real estate speculators who profit margins, enabling them unprofitable real estate speculation, only to give up real estate speculation.

Fifth, improve the legal mechanism to provide a legal guarantee price stability. Under German law, if property developers to house prices more than a “reasonable price” of 20% is “high price”, constitutes a violation. Buyers can sue to the court, if the prices have not fallen within reasonable limits, the seller will face a fine of up to 5 million euros. If the property developers to house prices more than a “reasonable price” of 50%, compared to “price profits”, it violated the “criminal”, a crime may be sentenced to three years in prison. These laws not only inhibit the domestic real estate speculators speculation, but also effective against a “group of overseas real estate speculators,” to interfere with domestic price stability in the market speculation.

German prices remain the same miracle of 10 years, given us a good reference model, our country must improve the housing market in the housing guarantee system and perfect the mechanism for more articles

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It's a pretty rough translation, is it the best out there? Needs to be tidied up before dropping round the office ;)

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