Ownership rate in Germany

Ownership rate in Germany

As of August 2021: Germany is considered a renting nation and is actually one of the worst performers in Europe in terms of home ownership. Only 45% of people in this country live in their own four walls, putting Germany in penultimate place. The red lantern goes to Switzerland, where the home ownership rate is just 43%. By way of comparison, the leader Romania has a home ownership rate of almost 96%, while other EU countries such as Italy (72%), Spain (76%), France (65%) and Portugal (74%) are also ahead of Germany.

Historical causes

One of the most important historical reasons for the low home ownership rate is the destruction of housing in cities during the war. After the war, rental apartments were built on a massive scale, and the dense population also contributed to this. In addition, tenants are better protected in Germany than in many other European countries: Protection against dismissal is high and policies tend to be tenant-friendly.

Significant nationwide differences

However, there are also clear differences in the home ownership rate within Germany. The fewest people own their own home in the east of the country, even though purchase prices there are comparatively low. Nine of the ten cities with the lowest home ownership rates are in the new federal states. Leipzig has the lowest home ownership rate of all the cities surveyed at 12 percent, while in Dresden and Rostock 14 percent each own their own property

Low ownership rate in the East, higher in the West

Here, too, the causes are historical. In the GDR, private wealth accumulation was only possible to a very limited extent. Apartments in apartment buildings were publicly owned or owned by cooperatives. The conversion of rented apartments into owner-occupied apartments was not permitted. Private housing construction in the GDR was therefore limited to detached and semi-detached houses. As a result, significantly fewer properties were inherited in the East.

The ownership rate in the capital is also very low: 85% of people in Berlin live in rented accommodation. Many young people, such as young professionals or students, rent in the trendy districts here and do not have the necessary capital to buy property. What’s more, home ownership prices in the capital have recently risen significantly and politicians are making it increasingly difficult to convert rental apartments into condominiums.

The situation is different in western Germany. Even in high-priced Munich, 24% live in residential property. In Hamburg, 23% of people own their own four walls. The Hanseatic city of Bremen leads the way with 37%. It is clear that the home ownership rate is higher in rural areas, but also in smaller cities. No wonder, as the cost of home ownership in cities is 47% higher on average than in rural areas.

Many dream of owning their own home

However, the desire to own a home is also widespread in this country and many tenants are thinking about buying a property. The advantages are obvious: owning your own property is an important pillar of retirement provision, the owner has much more freedom than a tenant, it cannot be terminated and the money invested is not lost – like rent – but is used to build up assets. It is possible to buy a property with just a small amount of equity, and there is a wide range of advice and real estate services available for potential buyers. Basically, if a tenant can afford a monthly rent, then buying a property is possible if the monthly loan installment is within a similar range. This is also facilitated by the current phase of low interest rates. Certainly, a loan has to be taken out, which scares many people, but the value of the property is often forgotten. After all, the money is not lost, but converted into residential property. So there is no need to approach the subject with too much anxiety, as many of the typical worries can be dispelled. So anyone dreaming of owning their own four walls should simply seek non-binding advice so that they can realistically assess the situation. And who knows: maybe the dream of owning your own home will be within reach!

If you are enthusiastic about the advantages of a condominium, then you should take a look at the attractive Fortis condominiums. These not only offer the typical charm of old buildings with high ceilings and stylish details, but also modernized and renovated living spaces that guarantee the highest level of living comfort. Discover your new home in one of the most beautiful old buildings in the best locations in Berlin and enjoy the unique feeling of living that only an apartment in an old building can offer.

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