Successful with real estate: saving, financing, investing

At a young age, the monthly budget is often not enough to accumulate wealth. This makes it all the more important to choose the right strategy for asset accumulation early on. Home ownership is an important pillar of this strategy. Saving alone is not enough.

According to the opinion research institute Kantar, less than 40 percent of Germans currently see themselves saving for specific purposes. This is the lowest figure in 25 years. The main reason is the strong price explosion. The savings motives of old-age provision and consumption are affected. Home ownership and capital investment, on the other hand, were able to maintain their level. The Federal Statistical Office has calculated a savings rate of 11.1 percent for private households for the first half of 2022. In the first half of the previous year, the rate was 18.2 per cent due to Corona restrictions. This was a historic high.

Financing home ownership plays an important role in wealth accumulation. In 2021, 316.5 billion euros were disbursed for private housing finance. The savings banks achieved the largest market share of 31.4 percent with almost 100 billion euros. The cooperative banks came to a market share of 25.6 percent. The market share of the credit banks was 23.0 percent. The building societies achieved their second best result and reached a market share of 12.7 percent. Real credit institutions, i.e. private mortgage banks and public-law basic credit institutions, came in at 3.4 percent followed by life insurance companies with a market share of 2.7 percent. The Landesbanken achieved a market share of 1.1 percent.

The formation of residential property is the classic entry into wealth accumulation. From 2023, politicians want to better promote the purchase of residential property. As a security in old age through rent-free living, owning one's own four walls relieves the burden on the social security systems. At the same time, home ownership creates an inflation-proof asset that can be passed on to children and grandchildren.

Lack of equity is often the biggest hurdle in buying a home. According to recent surveys, 80 percent of tenants would prefer to live in their own four walls. 25 percent of them were planning to buy a property, even though almost all of them said that this was more difficult today than five years ago.

(Photo: © Wayne Harrison, Pixabay)