In most European countries, there are significantly more property owners than in Germany
As "Russkaya Germaniya" notes, these data are provided by the research institute Empirica together with the association of land savings banks involved in financing mortgage transactions (LBS). The study is based on a current sample from the Federal Statistical Office, which analyzes the income and expenditure of German consumers. It is conducted for 60,000 households in the country once every five years, most recently in 2018. At that time, only 42% of German residents lived in their own house or apartment – 1% less than in 2013.
This is the first time the share of renters has increased in the last three decades. According to LBS, no other European country has such a large proportion of the population living in rented property.
As before, there are large differences in the share of owners between the old and new federal states of Germany. In the east of the country, only 36.4% of the population own property, in the west – 44.9%. The maximum share of homeowners in West Germany was reached in 1993 (48.1%), and this figure has been steadily declining over the past decade.
Before reunification, in the 1980s, the share of homeowners in West Germany was steadily growing. With the addition of the territories of the former GDR to the overall statistics, where housing ownership was rare before the fall of the Berlin Wall, the figures changed, but the growth prospect was constant – except for the last five-year period.
Analysts identify several reasons for these trends. The slow growth or absence of growth in the share of owners is the result of social and economic phenomena characteristic not only of the east but of all of Germany. First of all, the country lacks a "new generation" of homeowners, while among 70-79-year-olds, their share has been steadily increasing over the last two decades.
The following generations are significantly less successful in terms of accumulating property than their parents. For example, in 2004, 34% of 30-39-year-old residents of eastern Germany and 37% of western Germany owned property. Ten years later, the share of owners in the same age group in both regions does not exceed 25-30 percent.
The decision to buy a home is easier to make the more settled a person's lifestyle and the stronger their position in society. The purchase of property often coincides with starting a family, say Empirica specialists. Typical buyers are young families who find their rented apartment too cramped after the birth of a second child.
According to the study, two-thirds of couples with children, but less than half of childless couples of the same age, live in their own home in Germany. Single people increasingly remain renters, as do single parents, although in eastern Germany the share of single parents with property is higher than that of childless peers.
As a rule, the share of owners in various regions and age groups is higher the earlier a young family was formed, the more elderly relatives there are around, and the cheaper the property. Since Germans are marrying later, the share of potential homeowners is also shrinking. In addition, German laws extremely well protect tenants and are very strict with owners who rent out property. A long period of residence only strengthens tenants' rights, and opportunities for price increases are limited.
Additionally, the outflow of young working-age population from regions to large cities with unaffordable housing affects the situation with buying apartments and houses. It is not uncommon for a young couple, both educated and well-paid, to be unable to afford the desired apartment in a good neighborhood of a German metropolis: the price surge in recent years has offset any wage growth, and purchasing housing in large cities is becoming almost impossible without inheriting a large sum or having substantial personal capital.
Moreover, potential buyers have to compete with investors, private individuals or companies, who buy square meters for future use or for subletting due to faith in the stability of such investments – the abundance of investors has noticeably raised prices. Finally, an important aspect is the increase in the share of the population with higher education in Germany. Young people move to cities for study, get higher education, look for jobs across the country, form and maintain long-distance relationships – such a lifestyle implies long-term renting rather than buying property.
Fundamentally, according to Empirica, the situation looks like this: the smaller, worse, and more expensive the supply of rental apartments, the higher the share of those who decide to buy in that area. It is more expensive with high demand, but there are also fewer available rental apartments in such cities, and they are not cheap. According to analysts, Germany has for the first time since reunification embarked on a path of further reducing the share of property owners.
All the above trends will intensify in the coming years. The high valuation of housing ownership in society has hardly changed, the value of one's own home in terms of a secure old age is clear to many, but attitudes toward saving and consumption are changing – especially single and childless people set different priorities.
However, the statistical data can also be viewed in a different light. The share of residential property owners in Germany is 42% – but if you count all resident owners, including family members, it turns out that about half of Germany's population lives in their own apartment or house. The highest share of those living in their own home is among children (58.1% of persons under 20).
Since 1998 this trend has not changed: the majority of German children live in their own four walls, young people – certainly thanks to their parents – end up "on their own turf" earlier and more often than their elders. As of today, taking into account all residents of an apartment or house, the share of owners is higher than the share of renters in four federal states – Bavaria, Baden-Württemberg, Saarland, and Rhineland-Palatinate. Despite this, in almost all European countries there are noticeably more property owners. According to Eurostat, the average share of homeowners in the EU is 60%: most often these are apartments (42%), followed by single-family houses (34%) and half of a two-family house divided by a common wall (24%).
The top five European countries with a predominance of owners over renters include Hungary (85.2% of residential property owned), Lithuania (89.7%), Slovakia (90.1%), Croatia (90.5%), and Romania (96.8%). In France, 64.4% of the population own their own home, in Denmark – 62.2%, in Austria – 55.4%. These three countries are at the very bottom of the property ownership hit parade, and Germany brings up the rear. Lower is only Switzerland, which is not part of the EU, where only 41.3% of the population live in their own apartment or house.