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The majority of tenants do not see the possibility to afford a home

More than half of German tenants would prefer living in homes – while most of them believe that they are not able to afford it. Those are the results of a survey of the ING-DiBa, that was conducted in 13 European countries with roughly 13 000 users.1 Therefore 51 percent of German tenants would love to change into ownership. On the downside 56 percent agreed with the statement ‘I can probably never afford purchasing my own house’. Nowhere else Europe-wide less people, except for the United Kingdom, saw the possibility of affording the purchase of a home.

Owners are happier than tenants

Only a few weeks back a representative survey of the German Savings Banks Association (DSGV) stated a similar outcome.2 Thus the majority of German savers had the opinion that self-used real estates are the best instrument for creating wealth, the willingness of young Germans to purchase property has declined. That is a major problem for the people, as owners are happier than tenants. About 80 percent of owners stated according to the ING-DiBA-survey that they’re happy with their current housing situation, while only 60 percent of tenants were satisfied. On the other hand the formation of in particular young people’s personal pension scheme is essential.

The survey of the ING-DiBa showed a reason, why the homeownership rate in Germany is for years stagnant at 45 percent3 – EU-wide the lowest value – although it’s highly favorable and has many advantages. Many German consumers believe that they cannot afford a home and therefore they not follow up with the possibilities. At the same time purchasing is in different regions of Germany even cheaper than renting, as the recent ACCENTRO-IW-housing cost report 2017 stated. Therefore the monthly burden for home purchasers is nationwide about 33 percent lower than it is for tenants, which is especially due to the historically low interest rates. Even if the interest rates would increase to 4.5 percent at the follow-up financing, owners are still better off than tenants.

Consultation is recommendable

A barrier that many potential home purchasers face is not necessarily the monthly financial burden, but it’s the inability to raise the required equity capital. Even at a 100 percent financing, home purchasers need to raise the high additional purchase costs on their own. This is mainly because of the property transfer tax that is increased constantly by the German states in recent years. Despite those challenges everyone, that desires his own home, is recommended to get professional consultation and calculate one’s own financial possibilities.