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Why the dream of owning a home for Germans often remains unfulfilled.

High prices do not allow families to buy single-family homes. Municipalities are slowing down new construction with restrictions. However, more and more Germans are buying real estate.

MARCH 01, 2021



"Your own four walls are the most important place in the world" is the advertising slogan of Bausparkasse Schwäbisch Hall. Indeed, many German families want to live in their own homes. In practice, this desire is fulfilled less and less often. Across the country, the number of approved permits to build single-family homes has more than halved since 1999, especially in metropolitan areas. In Berlin, for example, according to the Berlin-Brandenburg Statistical Office, from January to November 2020, only 1,023 homes for one and two families were approved.
At least construction is still underway in Berlin. But soon there will be problems with construction sites all over Germany. In Hamburg, for example, the Northern District has decided to stop issuing permits for the construction of private houses in the future. And even now one- and two-apartment houses in Hamburg are practically not being built. From January to November 2020, only 867 houses with one or two apartments were approved in Hamburg. In the same period last year, there were 871 of them. And in November, only two one- and two-apartment houses were approved.
 
Rising real estate prices
Today, if you want to buy your own home instead of building it, you will quickly reach the limit of your financial capabilities. Real estate prices have risen 87 percent nationwide over the past decade. And in some regions, housing prices have more than doubled over the same period. In Munich, for example, according to Immobilienscout24, a single-family house in a medium-sized residential area now costs 11,750 euros per square meter. With a living area of 150 square meters, it will be about 1.7 million euros. Middle-income people cannot afford such real estate.
Due to rising prices, property buyers have to pay more substantial amounts on mortgages. Credit broker Hüttig & Rompf has set the following figures: if in 2010 borrowers could afford to finance their home for one family for an average of 989 euros per month, now they have to save 1,292 euros per month. This corresponds to an increase of 31 percent.
 
Low percentage of property owners
Compared to the rest of Europe, Germans are considered poor when it comes to home ownership. The level of housing ownership in Germany is 51 percent, which is below the EU average (28 member states) of 69 percent. Although in some countries even lower values, such as Switzerland 42%.
 
The share of households in European countries
It is noteworthy that the proportions of single-family houses, two-apartment houses and condominiums in residential European real estate are distributed differently. On average in the EU, 35% property owners own a detached house, 19% a duplex and 46% an apartment. In Croatia, the share of single-family homes owned is the highest at 68 percent. This is more than twice as high as in Germany. If Germans buy housing, they prefer condominiums, which account for 56 percent.
Property ownership often depends on the well-being of the region. Therefore, many suspect that economically powerful Bavaria has the most owners. In fact, the most problematic Saar is in first place with a 60 percent share of homeowners, and Berlin closes with 17 percent. The capital of Germany is a stronghold of tenants.
 
Share of homeowners in Germany
As for the increase in owners, in Germany there is a positive trend in almost all federal states. Nationwide, the figure rose from 41 percent in 1998 to 44 percent in 2018. The proportion of families with their own homes has grown, especially in the eastern federal states. In Saxony, for example, the figure rose from 29 to 34 percent.
 
 
Source:  Handelsblatt Media Group

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