Vast Majority of Germans Crave Homeownership
84 percent of all Germany would rather be living in their own abode instead of renting. This is the gist of a poll conducted by the Civey public opinion research institute on behalf of the Spiegel Online news magazine.1 Included in the 84 percent are tenants who would love to own a home outright as well as owners who do not regret their decision.
According to the poll, 16.4 percent of the respondents stated their intention to buy a condominium or detached home within the next five years. Worth noting is that younger age groups in particular are planning to go for homeownership. Among the 20- to 29-year-old respondents, 28 percent said so, as did 34.4 percent of those aged 30 to 39. These age groups are particularly relevant in the homeownership context because they have enough time left to repay their mortgage loans before reaching the age of retirement. One possible reason that could be motivating a relatively large number of young people to contemplate buying property over the next five years is the anticipated price trend. No less than 76.5 percent assume that prices will perk up during that time period, while in densely populated areas an actual 85.8 percent believe the same.
Grand Coalition Government Reviews Roll-back of Estate Agent Fees
The weekly Zeit Online and the Immobilienscout24 real estate portal also conducted a poll on the subject of home buying.2 It found that a price tag of 400,000 euros marks the threshold beyond which most Germans are loath to go. In fact, 29.6 percent of the respondents are looking for properties selling for less than 200,000 euros, whereas 44.6 percent intend to buy a flat in the price range of 200,000 euros to 400,000 euros. Only 25.7 percent of the respondents are hunting for pricier real estate. The majority is planning to commit an equity stake of 20 percent in the financing arrangement.
At the moment, the homeownership rate is 45 percent in Germany. It is probably not least with regard to the huge interest among Germans to buy property that the governing Grand Coalition is looking for ways to boost homeownership in addition to the already passed child tax credit for first-time home buyers. Especially the Social Democrats are focusing on the idea to ease the burden of estate agent’s fees for condominium buyers. The Federal Ministry of Justice, which is headed by a Social Democrat, is reviewing the option to extend to contracting-party-pays principle to sales properties.3 Capping the estate agent’s fee also appears to be under discussion. Worth noting is that neither the contracting-party-pays principle nor the fee cap is mentioned in the coalition agreement—whereas the agreement does specify an examination of possible ways to reduce the real estate transfer tax for owner-occupiers. But no one in the Federal Government is currently talking about a reform of the real estate transfer tax.