Where My House is My Home

Germany, like many expats, is seemingly caught between two worlds. Globalization and the new capitalism on one side with tradition and democratic socialism on the other. I am not going to write about capitalism vs. socialism, particularly… this is about how Germans treat the idea of home, but these things often spill over into politics and economics. I’ll do my best to steer away from those since they’ll just distract us.

Over the past few years Germany has been making the transition from traditional Continental European nation to a globalization convert. This means that certain old ways of looking at the world have been evolving. This is (sometimes painfully) clear with the global real estate and economic crisis.

Traditional German attitudes towards real estate are quite different than American (and of course, American expatriate) expectations.

While certainly not true 100% of the time, houses tend to be thought of as commodity items in places like the US. Houses are bought and sold regularly, people and families are expected to trade up (sell a house and then use the profit to buy another and bigger house and repeat and repeat and repeat…). This was becoming more the norm in places such as Ireland and Spain up until the recent economic crisis, as well. If the speculation (purchasing properties with the sole intent to sell for a profit) was aggressive a capital gains tax is attached. Generally speaking, this means selling a property less than two years after the initial purchase and if the owner has not lived in that particular house.

Germany is, and has been, a different animal. I will not chalk this up entirely to economic models since economic models really are a reflection of the people that live in a country, so I will say this is a matter of the German state of mind. In Germany, the norm is to not even buy a house at all. Mostly they rent. 58% of Germans to be exact. The people who do buy houses hold onto them for longer than the average American. There are a number of reasons for this, financial and cultural… but again the financial reasons are really just a reflection of how Germany functions and it’s state of mind as a nation. The capital gains tax time limit, two years in the US, is ten years in Germany. Since the tax rates are also higher than in the US, this slows down speculation in the housing sector. As a consequence, houses are not seen as the fiscal investments that they are in the US.

Typically, German houses are multi-generational homes and/or rental income properties.

My neighbours to the right of me have four generations in their home. My neighbours to the left have three generations. When I was growing up in California, the idea of staying in one home so long spoke to a lack of independence and negative judgement from society. I was supposed to move out and get my own place. I was supposed to work my way up the career ladder and eventually have a nice car, a house with a white picket fence and so on. If I didn’t move out by the time I was bound for college then I was poor or a failure… so the general wisdom went. Think about it. In the US, when we learn a 30 year old man and his wife are living in the same house as his parents we tend to have a negative feeling about it. Not so much in Germany.

It took coming here, 6000 miles, for me to see that there could be another way of life. Taken out of the context of what was expected growing up in the US, I discovered what this elusive life/work balance thing is all about. Let me fill you in:

– Being there for my two sons as they grow up.
– Grandparents being readily available to help with the kids.
– Making quality time to spend with my wife.
– Making time to sit under the sun with my coffee or whatnot and enjoy the fresh air.

All of those things are about having a life without that seemingly omnipresent stress about work that I had in the US. Work is how we financed that lifestyle, apart from credit, and that meant working so much that I missed some important bonding time with my first son.

In fact, I could have had that life/work balance in the US but I felt the peer pressure to work for more and more. Without the work, or the house, I was an unimportant component of society. A lost soul in the eyes of my peers.

I just don’t feel that way here. Making time for family and my own personal life is a cherished part of the culture. Ok… you are wondering how on Earth all this relates to houses and economic models. In fact, I’ve been saying it all along… these things are all just reflections of who we are and what is important to us. To my neighbours with three or four generations of family under one roof… it is about family. They are the ones you come home to. They are the ones that support you, and you support. They are the ones I hear playing and laughing good naturedly in the garden every afternoon.

In my case, they are the ones who sit with me under sunshine, next to the barbeque and make sure my glass is always full. Our houses are not tools to make a profit, they are where we build our lives and our families.

Geoff