People in Germany want to own their own home. After all, they associate their own four walls with more self-determination and opportunities for personal fulfilment. However, there is currently a wide gap between desire and reality. This is shown by the home ownership rate.
The home ownership rate is the proportion of households with residential property in relation to the total number of households. Here, Germany differs significantly from other EU countries: 46.7 per cent of households in Germany lived in residential property in 2022. This is the lowest figure in the EU. In addition to Germany, Switzerland, Austria, Denmark, Sweden and France also have comparatively low home ownership rates, although prosperity in these countries is relatively high.
The German Economic Institute has published a new study on home ownership entitled "Generation Rent". According to the study, fewer and fewer people in Germany can afford to own their own property. In 2022, 44 per cent of all homes will be owner-occupied. In 2011, this figure was 0.9 percentage points higher. The home ownership rate has fallen in all western German federal states, with the sharpest declines in Bremen and Schleswig-Holstein at just under three percentage points each. In the east, on the other hand, it rose in all federal states, most strongly in Saxony at 1.6 per cent.
Younger households are particularly affected by this decline. Between 2011 and 2022, the home ownership rate of those under 50 will fall by more than four percentage points to 30.4 per cent. Among older people, it is almost twice as high at just under 57 per cent. The reason: today's younger generation is particularly affected by the sharp rise in property prices and equity requirements.
Conclusion: If fewer people can afford to buy their own home, they will have to switch to the rental market. This drives up prices there. The study therefore shows clear options for policy action: Anything that lowers purchase prices strengthens home ownership and relieves pressure on the rental market. This includes lowering property transfer tax, simplifying building standards and expanding state subsidy programmes.
Photo: © Garik Barseghyan, Pixabay
