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However, at that time, rational Germans did not silly go with the flow. May be that they have foreseen that Keynesian Fiscal Deficit was just a short-term shot in the arm, can not long-term use. So they adopts own Freiburg School neoliberal theory that can sustain for long-term stable development.
Now, nearly 80 years practices have shown that the choice of Germans is smart prescient.
Many facts show that Fiscal Deficit has not only lost its positive effect, but also has become economic heroin, and the addiction is quick growing in most of countries. Great many countries have become the drug addicts, if, stop using drugs, they certainly can not stand. However, if, continue in drug use, destined to premature death. Now Fiscal Deficit has become unbearable economic nuisance.
We must be clear that is not the fault of the great Keynes, but the fault of the dogmatists of the policy makers who are too ignorance to make a rational judgement independently with a instinct that can only draw a tiger by copying home-cat, without ability for making a solution according to the actual objective situation in changing constantly.
In the governance of real estate market shows similar way.
Following is some reports regarding German government timely regulating real estate market.
Mar. 5, 2015, German parliament passes law to cap sharp rent rises: After months of discussion, the German parliament has agreed measures to control sharp rent rises in areas under housing pressure. Nearly 60 percent of people in Germany rent their homes. The law will restrict new rental contracts in areas of high demand to within 10 percent of the average local rent. In areas of high demand such as the major cities and towns with universities, rents are currently rising by 20 percent to 30 percent.
June 3, 2015, Germany introduces big changes to rental market
Mar. 11 2014, Germany Seeks to Shift the Broker-Fee Burden
Jan. 23 2014, Most Germans don't buy their homes, they rent. Here's why
The Real Economy, according to the Economy on Wikipedia, is the part of the economy that is concerned with actually producing goods and services, as ostensibly contrasted with the paper economy, or the financial side of the economy, which is concerned with buying and selling on the financial markets.
Intuitively say, that paper economy or financial economy is to make money by money.
The real estate is a part of the real economy. However, it is a wand with opposite magic that either can benefit or harm to the economy. In the financial economy over developed today, in most cases, it harm to the economy.
On one hand, due to the common sense of the real estate has a hedge against inflation with a better appreciation expectation, so people prefer real estate as a measure against currency devaluation. Therefore, it possesses the potential of attracting investment to drive the development of related industries to play a positive role in promoting economic development, even being taken as the indicator of the economic development.
On other hand, the overheated investment on the real estate easily push up the land prices, and thus raise the operating cost of the industrial and commercial businesses, as well as the cost of people's daily life. Therefore, it possesses the potential of deteriorating economic environment to play a negative role of hindering economic development.
As the result, in some extent, real estate has been used as a kind predatory means to plunder on the real economy.
If, we allow speculative real estate developing freely, in particular, the involvement of a large number of foreign hot money, is bound to damage the real economy as that of the hurricane to destroy living environment for the industrial and commercial enterprises and the life of the most of the locals.
We should not forget the painful lessons that Japan's bubble economy in 1980s and the financial crisis 2008 are both speculative real estate related.
Due to the suitable living climate, political and economical stability of the Canadian-based, Vancouver City is favored by the real estate players. The negative impact of overheated real estate on the local economy is more and more prominent.
It is time to consider the seriousness of the problem and the proper response measures.
2. The speculators are squeezing city's builders out of Vancouver
In the morning, Apr. 14, 2014, I read the article <Foreign property buyers restrictions needed> and was moved by the rational views of Mr. Peter Ladner on the overheated Real Estate in Vancouver.
In Apr. 2011, he once told CBC News: "If our prices are being driven up by people who are simply investing in our community and not living here, there are a whole lot of problems that result."
He worries that prices are forcing people raised in Metro Vancouver to move elsewhere and preventing others from moving to the area.
In the interview with David Berner on Shaw cable television, 25 May 2011, Peter Ladner said that:
"I think about my own home that I bought in 2000, it's worth about four times what I paid for it now. … I have four kids, three in their twenties and one in their thirties, and they're never going to be able to afford to live in Vancouver because they're not already in the market."
"I heard a story, a company wants to expand, they need workers, they can not find them here, because all the young people here in somewhere else, because they can not afford for living here. They hire people, recruit people from Toronto and other area, the people take one look at house price and they say that I can not move here, so now the company in thinking about moving to Waterloo."
"We are declining the number of the companies in head offices in Vancouver. A survey on 60 CEOs about what keeps you from expanding and building the business here, the number one thing is the price of property, which is related. Number two is the shortage of skilled labors, which is also because of the housing cost."
"We also got the widening the Rich and Poor things, to disablize the society. And got cases were who move here, new immigrants, they want to move here work hard, make the way to get whole economic security, can not happen."
Video: Peter Ladner - Restrictions on Foreign Ownership
https://www.youtube.com/watch?v=Z5SAgli5Yww
Sep 24, 2013, Peter Ladner published article New business balks at Metro's affordable housing crisis:
“Lower housing prices are a dream for most of Metro Vancouver's business community and a nightmare for the real-estate-construction-home-financing consortium.”
“Vancouver mayor Gregor Robertson cites Vancouver's unaffordable housing prices as a top priority. Surveys of CEOs by the city's economic development commission have identified crippling housing prices as a top barrier to business retention, expansion and attraction. Stories abound of promising young employees leaving town and senior management recruits unable to move here.”
The worse is that overheated real estate is not just limited in Vancouver, Canada.
Jun 07, 2013, Why are home prices so high and when will they fall? reported with that:
"A recent report from the Organization for Economic Co-operation and Development (OECD) that revealed Canada has the third most overvalued real estate in the developed world offered few surprises for analysts who say the market is heading for a price correction
"The OECD report used two housing measures — the price of the average home compared to what it could be rented for and the home costs compared to the average salary."
"The report found that based on rents, Canadian real estate is overvalued by as much as 60 per cent and in terms of prices to incomes, real estate is still as much as 30 per cent overvalued."
"The housing market is an accident waiting to happen. If there is some sort of macro shock, there's a lot of dead air where house prices are now and where historically they should be," said Ben Rabidoux, creator of the blog Economic Analyst, which looks into housing and mortgage trends. "And there's a sort of saying that a market waiting for an accident to happen usually finds its accident. And that's how I would describe it."
From above reports, we may clearly know the severity of the status of the Canadian real estate.
--- Frank July 29, 2015 in Waterloo, On. CaJuly 15, 2014 17 Views
http://cbw.ge/economy/what-are-the-restrictions-on-the-purchase-of-farmland-in-different-countries/
As it is known, the Georgian Constitutional Court invalidated the Moratorium on the acquisition of agricultural land by foreign citizens. According to the parliamentary majority, it coincided with the beginning of active work on the formation of new regulations on this matter. Proceeding from this, the Ministry of Economy of Georgia decided not to renew the land privatization, which are state-owned.
“We will develop such regulations that will not violate the rights of skilled and qualified investors as well as the banking system. With regard to the suspension of the privatization process by the Ministry of Economy, it was necessary to wait for the development of a new law that will take into account international practice, in order the land privatization not to lead to an increase in social problems and unpredictable developments,”- Economy Minister Giorgi Kvirikashvili said.
According to him, agricultural land must be sold, but regulation and restrictions are needed.
How things work in this area in the developed countries of Europe? How the right to sell agricultural land to foreigners is regulated there?
Germany: Procedures for purchase of agricultural land are regulated by a special law, which imposes certain restrictions on foreign individuals and legal entities. The consent of a special regulatory body is required for minimum purchase of the land (in each region of Germany it is different). A regulator determines whether anyone has a preferential right to purchase the land – in most cases, the German government encourages consolidation of farm land and therefore, German citizens owning land near the area to be privatized, have the priority right to buy it.
The country has a very strict attitude to inappropriate use of agricultural land, so one of the prerequisites for privatization is the presence of sound business plan for the use of the land plot only for the purpose of agricultural production.
Sweden: Individuals of foreign nationality can buy agricultural land without any restrictions, but in regions with low population it needs a special permit.
To obtain this, the applicant must have the appropriate education or experience (sometimes both together), in some cases the buyer is required to live on the land he bought.
Austria: Acquisition or receiving of agricultural land in long-term lease by a foreign citizen is possible in the case of authorization from the regional authorities. In particular, the relevant authority determineswhether or not the privatization will cause any harm to social, economic, or cultural interests.
Greece: The main constraint is permission from the Ministry of Defense if a foreign national wishes to buy land in the area adjacent to the state border. In the case of direct investment, as a rule, a permit is fast and without problems.
Tighter restrictions on agricultural land operate in the countries that have recently joined the European Union, as they had feared that after the opening of the market, farmers from developed countries would use the economic problems of local citizens and buy land cheaply.
In Estonia, there are no restrictions on the acquisition of agricultural land of less than 10 hectares. In order to buy more than 10 hectares, a citizen of any country in the European Union must be married to a citizen of Estonia, live in the country for at least three years, and be engaged in farm business.However, he has the right to buy just the land plot , which he took earlier in rent and on which he works at the time of the submission of the application for the purchase of land.
According to official information, currently foreign nationals own 19 000 hectares of land in Georgia, that is 0, 7% of the total agricultural land in the country.
The law will restrict new rental contracts in areas of high demand to within 10 percent of the average local rent. In areas of high demand such as the major cities and towns with universities, rents are currently rising by 20 percent to 30 percent.
Under the new law, responsibility for paying agency fees will be transferred from tenants to the owners or landlords who commission the agents. Until now costs of around two months rent, in advance and in addition to deposits, have been charged to incoming tenants to cover real estate agent fees.
Federal Minister of Justice and Consumer Protection Heiko Maas said after the vote on Thursday: "This is a really good day for tenants in Germany."
Maas said the cap was "important for average earners, for people on limited incomes and for people with children looking for a larger apartment, without being driven out of their areas."
Maas said he expects the measures will benefit about 400,000 tenants every year. "We do not want people on average incomes be pushed to the outskirts," he said. Apartments are not a commodity and people's homes and should not be traded like shares on the stock exchange, he added.
The Bundesrat, the upper house of German parliament, still has to approve the law. The new measures are due to come into force on June 1 and will have to be adopted state-by-state, with each one deciding in which regions the measures will be applied.
The German Tenants' Association called on the authorities in the regions under housing pressure - such as the capital Berlin, Hamburg, Bavaria and North Rhine-Westphalia - to implement the new measures as soon as possible.
The caps do not apply to newly built housing or homes that have been extensively renovated. The coalition government wants to encourage new building projects to alleviate current housing shortages.
Green party politician and chair of the Committee on Legal Affairs, Renate Künast, accused lawmakers in both the grand coalition government of the Christian Democratic Union and the Social Democratic Party of taking far too long to come to an agreement over the rent rise cap. Rents had risen still further in the intervening months the coalition had taken to agree on the measures, she said.
The Bundesrat is expected to debate the new law on March 27.
jm/sms (epd, dpa)
Germany introduces big changes to rental market
June 3, 2015
Two new laws in the residential real estate market will have a big impact on renters and landlords in Germany.
On 1 June 2015, a new law in Germany became effective which challenges current conditions in the real estate market.
Until now, it was mostly the tenant who had to pay the agency fee for locating a rental property. With the new law, the agency’s commission will be paid by the party who hires the real estate agent – not necessarily the tenant.
The new law is intended to help tenants, especially in metropolitan areas and urban centres where apartments are scarce. With the old legislation, a change of residence was expensive for a tenant. The agency fee for a new apartment costs up to two month’s rent plus VAT, if brokered by a real estate agent. This two-month fee was borne by the tenant in almost all cases. For the landlords, on the other hand, the old law was beneficial – they took advantage of the real estate agent’s services without paying for it.
According to the new law, the commission will be paid by the person who hires the real estate agent. This can be either the tenant or the renter. Anyone who tries to get around the new law will face a heavy fine. In addition, it is now illegal to charge tenants retrospectively for locating an apartment. Real estate agents have to decide which side they are working for – they may not act on behalf of landlords and tenants at the same time.
For the real estate industry the turnaround is a challenge. Real estate agents will have to persuade property owners in Germany that they can provide a high-quality service. The search for reliable, financially strong tenants is such a service. But at the same time, many landlords will take the search for tenants into their own hands, at least initially.
It has to be seen if, and in which way, the balance between tenants and landlords will be shifted by the new law. Internet portals are likely to benefit because they facilitate direct contact between landlords and prospective tenant. Tenants will be able to choose from a wider range of commission-free apartments, and landlords will pay more often than before for the services of estate agents.
The new legislation applies only for the rental market: when buying a house or an apartment, commission will be paid by the buyer, as before. The commission usually costs between five and seven percent of the sales total, depending on the region.
Newly built rental properties are excluded from the rental cap following pressure from the building industry, which complained that a cap on rentals of new homes would slow down the development of the industry.
Rental control law
On 1 June, 2015, another housing law came into force that will benefit tenants in Germany. The so-called “Rent control law” is being introduced to limit the increase in rent to no more than 10 percent above the local average in areas that have housing shortages. So far only Berlin has implemented the law, causing a delay of the impact of the new law on the country-wide rental market.
Berlin’s population has risen by almost 150,000 since 2010 but only 15,500 homes were built during that same period, according to a report by Jones Lang LaSalle (pdf). That property shortage produced massive pressure on the rental market, which in turn gave property owners a free-hand when it came to rental prices – with this new law that changes.
On the news of the passing of new law by the German Bundestag, Lukas Siebenkotten, the director of the German Tenant’s Association (Deutsche Mieterbund) commented, “This is a good day for tenants in Germany. There is a now a legal structure to slow down the increase in rents in cities, metropolitan areas and university towns.”
Find the facts you need to know about renting a house or apartment in Germany.
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