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Germans 'poorer' than European neighbours

The Local · 22 Mar 2013, 14:12

Published: 22 Mar 2013 14:12 GMT+01:00

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Germany's Bundesbank asked thousands of households in-depth questions about their financial situations – including their income, property, outgoings and how likely it would be for them to lose their jobs.

The results differed wildly from those in other countries, whose state banks also took part in the EU-wide survey. The French, for example, seemed to have three times more money in assets than the Germans, the Süddeutsche Zeitung reported on Friday.

Average assets of a German household were - in 2010 when the study was carried out - around €220,200 without subtracting debt and €195,000 if debt was taken into account. Still, statisticians said this figure was unrepresentative of the country's wealth.

In fact, a better indication was to take the median, or middle of the range figure. This was much lower, standing at just €67,900 per household before debts and €51,400 with debts taken into account.

The fact that this number is so low compared to the average figure suggests that a small number of Germans have large assets, said the paper.

In France, the median was double that of Germany's, standing at €113,500. Spain's was €178,300 and Italy's €163,900. Austria's, however, was only slightly higher than Germany's at €76,400.

When Germany's figures were broken down, disparities started to appear, namely between those who owned their home and those who did not, as well as between the east and west of the country.

In the west, the median after taking debt into consideration was €78,000 while in the east it was a fraction of this at just €21,400.

Among those who owned their house, the figure was entirely different. Germans who owned property and had paid off the mortgage had median assets of €255,600. Those who were still paying off their mortgage had €160,200 per household.

Renters, the numbers of which are high in Germany, had median assets of just €10,300.

Story continues below…

The study was carried out across Europe between September 2010 and July 2011 in order for the European Central Bank to be able to make decisions with a better insight into how much money its ward had.

In Germany, the Bundesbank asked 3,565 households.

The Local/jcw

The Local (news@thelocal.de)

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Your comments about this article

15:05 March 22, 2013 by yllusion
I have the impression that housing in France is much more expensive, right? So, this really isn't a reliable parameter, unless you normalise it acress Europe.
16:20 March 22, 2013 by royp
Actually, doesn't mean anything as houses have been shown to not be very liquid as an asset, and also in negative economic times turns out to be massively over valued and negative equity: where that outstanding on mortgage is higher then real property price. Also how have they estimated peoples assets, although the average person may have insurance for assets such as fixtures, fittings, furnture, entertainment equipment such as tv blueray, ipad, computer etc, what is the real fire sale value of these assets second hand probably only maybe one or two thousand max, but may have costs 100 thousand to buy. probably the only assets that are really liquid and hold a substantial value are cars and jewelry.

But this article does illustrate is the cultural differences where Germans do not typically buy houses, only those with high incomes.
18:26 March 22, 2013 by Beachrider
Having home ownership as an objective is high in the USA, Mexico and Canada. It is relatively high in France and England. It just isn't as high in Germany.

People are certainly insulted from the variability of asset-value with owning a home. The issue is finding the alternatives that German's use to establish long-term savings/investments versus their neighbors.

It would be interesting to find out how Germany contrasts with neighbors in its individual objectives for long term savings/investment. I am guessing that the bottom lines will be closer than just for the housing-investment angle.
18:47 March 22, 2013 by chicagolive
The thing about Germany poverty is hidden by obscurity. The economic miracle of Germany right now is really not a miracle. It is based on using a new type of forced labor. You either work for €400(while still pulling full time hours)or you work for a €1 and being treated like old trash ready to be thrown away. People here are very poor really and the money is not really their that they claim.
18:47 March 22, 2013 by Bulldawg82
As a home owner, I can tell you that owning a home is very OVER-RATED!!! A home is like a ravenous teenage boy with all their needs and appetite. A home is a never ending money pit with two choices: Buy an older home that you will have to sink a lot of money into to maintain OR buy a new home that is built like shyte and you will never get what you paid for originally (much like an auto). My home is was built in 1978 and it "nickel-&-dimes" me to death. Wish I had never bought it.
20:03 March 22, 2013 by Englishted
I don't know about the rest of Europe but my hourly rate is now 19 cents less than it was in 2000.

And yes it is for similar work ,some f-ing " financial powerhouse".
21:59 March 22, 2013 by US-TommyBoy
This how socialism works for the EU. Each to his ability, each to his need.

Trouble is you cannot bring up the PIIGS to your level Germany, so they are bringing you down to theirs.

These are suckling PIIGS that you cannot wean.

What then happens when the entire EU has 20% unemployment?
23:55 March 22, 2013 by gorongoza
If you I were a politician in Germany who want to be voted into that big office again and again I would take advantage of the electorate that love to be caressed with the "feel good" music. I would sing this chorus over and over again till it becomes a fact.

Germans love it when you tel them that they have the best of everything in their country, especiallly the best of live on mother earth. They do not take a second to look at what kind of life people in other countries lead by way of comparison. For them is enough when those in high offices tell them "we are doing very well here in Deutschland". This point is cemented when the man in the street sees for himself a lot of people around him speaking various foreign languages. His conclusion: "we should be the best, otherwise these people could not be here". This falsification of facts is further agravated by the media in Germany:they show absolutely nothing of the poverty we see in Germany,but instead pull their muscles to breaking point in an effort to potray other countries as the brewing pots of poverty - paying a blind eye to the poverty in their backyards. I used to think its mere hypocrisy but after some time I discovered the truth. Its some fellows taking advantage of people`s ignorance of what lies beyond their borders.

I experienced this ignorance myself when I asked a fellow German if he was ever abroad. The ansewr was "yes, I was once in Bavaria". That answer gave me a bit of homework: for all along I thought both Niedersachsen and Bavaria are states in Germany only to learn from this fellow that one is in Ausland.
00:03 March 23, 2013 by zeddriver

That depends on a few factors.

1, Unlike rent. Your house payment stays the same. And if one doesn't hop from house to house. You may end up payment free.

2, The main problem with the modern housing market in the US was folks over buying. A lot of folks just had to have the McMansion. And the banks made loans to folks that had no business getting a home loan.

3, There are reverse mortgages. No! You don't make a lot of money. But. The banks buys your home through monthly payments. But you can stay in your home till you die.

4, In the US. You can deduct the interest on a home loan from your income. Thus lowering your tax rate.
06:12 March 23, 2013 by RosieRosebud
One additional problem with the US housing market was the absurd prices that were being paid for homes that in no way warranted what they were being marketed for. It was an absolute joke. People were paying, in many cases, new home prices for a home that was 35-50 years old and was in terrible condition. People were so stupid to believe that home prices would simply keep increasing and that money would be endlessly made by buying and selling one home after another. It became so over priced that homes which were considered trash already in the 1980's were selling for prices that were paid for new homes in the late 1990's. i have never seen anything so outrageous in my lifetime. There were also many people who were buying multiple homes, renting these homes out to others, assuming that in several years they could turn a huge profit. Well, ,when the bubble burst there were far too many stupid, greedy fools who were holding the bag on homes that were actually worth only a fraction on the price people had paid.

Additionally, during this time the banks were pressuring people to take out home equity loans (to be used for purchasing of cars, vacations, etc), based upon the new market value of the property. We were getting so many high pressure calls at our home, from our home mortgage company, to borrow more money because the house was now worth so much more, given the market conditions. We were literally being pressured to take 50-75 thousand dollars in second mortgages. I finally said to them that I did not want heir money, even if the interest rate was so low. I said I did not need their money and that I could buy the things I needed without taking a loan. These money pushers were aghast!!!!!! They simply could not fathom that we would turn down such low interest money that was literally being handed to us. It was absolute insanity here. The issue is that the banks were acting like drug dealers. They were absolutely out of control.

The roadways had suddenly become filled with exotic and expensive vehicles, boats, motorhomes, etc. it was as if everyone had suddenly become wealthy.

Of course, people who had always struggled to provide for their family suddenly found themselves awash in cheap money, based upon home appreciation values. They readily accepted the offers of easy second mortgages, and used the money for toys.

It was actually quite disgusting. It was like watching an orgy.

My parting comment is that the banks should fail. They should collapse.

The world can pick up the pieces.

Execute all bankers who did this. Treat them as treasonous scum. They have destroyed many nations.
07:41 March 23, 2013 by smart2012
R u surprised? I have been leaving 11 years in Germany and costs of living vs neighbors is double.. But u do not earn double.. And with all productivity being pushed to keep competitiveness, salary and job conditions got worst, plus retirement is now a joke.. I have been telling this since years now, and sad enough Verkel and Bild hide this to focus before on Greece and now on Cyprus (GDP of those 2 countries together maybe equal Erfurt GDP)...

Germans, wake up or it will be too late
09:48 March 23, 2013 by Englishted
@ RosieRosebud

Good grief ! I am in agreement ,and could not be more so with your last paragraph.
13:40 March 23, 2013 by zeddriver

While I 99% agree with you. I do hold part of the blame on the people that took such loans without giving a moments thought to the future. They (the consumers) are just as much to blame.
15:17 March 23, 2013 by realist1961
Cigarettes do not make you smoke them, alcohol does not make you drink it, prostitutes do not make you have sex with them, and banks do not make you borrow and spend more than what you are able. People need to take personal responsibility for their own actions.
22:13 March 23, 2013 by zeddriver
But as to why the German people do not believe in owning a home. Is beyond me. I have never ever heard of rent NOT going up. Even though the mortgage for the landlord has remained the same. Add to that. The fact that Germans tend to not move around very much. Which would then make even more sense for the purchase of a home.
23:43 March 23, 2013 by rwk
The German economy is completely overvalued. Huge public projects (Berlin airport, harbour in Hamburg, tunnel in Leipzig) are overbudget and late, and the cost of everything keeps on going up and up. The politicians have so completely screwed the energy economy, with their post-Fukushima fears and irrational grab at 'green' energy, that consumer prices for energy are going up and up, while at the same time, more coal is being burned, causing more pollution. I would not invest in a house in Germany, and if I were a citizen, I'd be very active to get rid of Merkel, the Greens, and their allies. My investments will be a combination of Canada, the USA, and Ireland.
14:18 March 24, 2013 by yllusion
@chicagolive You either accept a low pay job or you go to unemployment, what do you prefer? It is better to decrease salaries and keep the jobs, so that money still circulates and people can survive, than to cut jobs throwing people into poverty and hampering the economy. Why people can't understand that? In Germany the conditions are still quite good compared with southern neighbours. Here if you have a good education and qualification you have a good job and a good salary. Compare with Portugal today where you can find job offers of 400 € / month for Mechanical Engineers.

About the issues of buying a house. It only makes sense to buy a house if you have safety and if you plan to stay in the same place for a long time. Today's world is different from 50 years ago. People move much more from town to town, from country to country. People are studying longer, building family in their 30's. Having your own house becomes a limitation when you need to have mobility and flexibility.
14:27 March 24, 2013 by pfauder35
16:59 March 24, 2013 by Rohland
Anyone who has been to Germany knows this. In the Netherlands the people have more assets but they also have much more debt.But what is happening is, that Germans,Dutch are now working so Greeks,Spanish,Cypriots can drive around in Porsche's in these countries it is normal for a small business man say a butcher to drive around in cars that normally only the professional classes can afford like lawyers or doctors. It is because of all the money under the table. They just don't pay taxes.Greeks ,Spanish etc are very wealthy. More wealthy then Germans or Dutch but it doesn't show in the statistics because everything is under the table.You need the tax authorities in these countries to go inside the homes and dig up the gardens.
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