More and More Young People Fancy Homeownership
The majority of Germans aged 25 through 35 would like to become homeowners in the not-too-distant future. This is the result of a recent survey on homeownership and construction finance (“Wohneigentum und Baufinanzierung”) compiled by the IMWF Institute for Management and Economic Research. A total of 1,000 Germans above the age of 18 were polled for the survey on behalf of the PSD Nord Bank. The study concluded moreover that young people look very much forward to buying a home of their own. Rather than simply wishing to live in their own abode, the majority of the so-called millennials are quite certain they will find a way to finance it, too. It appears that this can-do attitude is definitive for the actual decision to buy property. No less than 64 percent of the 25- to 35-year-old respondents are confident they will be able to finance a home. Their funding preferences are financing models that are flexible but at the same time reliable and secure. This makes it safe to say that it is a highly optimistic age group. In no other age group had so many respondents made up their minds to buy a home.
Homeownership as Residential Upgrade and Investment in the Future
The millennials among the respondents cited the prospect of getting to move into a larger and more attractive apartment as their main arguments in favour of homeownership. This in turn appears to be motivated by the desire to start a family. Historically low interest rates are another enticement for buying a larger home rather than renting one. For nearly half of the respondents (47 percent), picking the right location is particularly important. Schools, doctors' offices and shopping venues should be available in the immediate vicinity. At the same time, 43 percent of the respondents fancy a quiet location and 41 percent “a nice neighbourhood.” Surprisingly, only one in five respondents cares about living close to the workplace. More important to respondents in this age group are child- and family-friendly residential areas (23 percent) and a clear green view (35 percent). The majority of the younger generation also sees buying property as an attractive forward-looking investment, not least in order to benefit from future rent and price growth, for instance. Specifically, 82 percent of the respondents in the age group of 25 to 35 years are certain that both rents and the demand for homeownership will keep going up. All that being said, millennials are not prepared to compromise whatever other plans they have in life in order to make their mortgage payments. Rather, they expect financial service providers to come up with flexible financing solutions that will preserve their financial leeway.