For all the matter about affordability, the fact is that Germany essentially remains a nation of renters. This was underlined by a recent survey by estate agency network REMAX, the European Residential Property Trend Report 2023. The brokers surveyed 23,000 people in 23 European countries and regions in July last year, with 1024 of them coming from Germany.
Notable from the survey is how Germans' willingness to buy has fallen heavily since as recently as 2022, ensuring that Germany remains at the bottom of the list of European home-owners, apart from Switzerland.
A comparison of the responses shows that the buying climate in Germany deteriorated significantly in 2023. Only 11.8% of respondents said they wanted to buy a property in the next two years - compared to 25.6% in 2022. This compares unfavourably with other countries: one in five other continental Europeans (20.8%) are planning to buy a property, says the survey.
For years Germany has collectively preferred the rental model. About 57% of households rent their accomodation, with owner-occupiers making up only 41.2% - a large number of those being in smaller towns and rural areas. In southern and eastern European countries, on the other hand, the home ownership rate is over 70%. The European leader is Greece with a share of 84.1%, followed by Italy at 83.4%.
Samina Julevic, CEO, RE/MAX Germany
Samina Julevic, recently-appointed CEO at REMAX Germany, says: "Despite historically low interest rates, falling purchase prices, more properties and good negotiating opportunities, Germans have not yet taken advantage of the opportunities on the property market."
Particularly hard-hit are the age-group 36-45, of whom 40% say they would now struggle to buy any suitable property. Affordability is less of an issue in the age- group 56-65, with 29% saying they would have a real problem with affordability. For, despite reports of a flight to the suburbs, 43% of prospctive buyers still would prefer to buy in the city, 35% in the suburbs and only 22% out in rural regions.
By not buying property, prospective buyers remain tenants - reducing the rental supply and helping to push up the rents themselves. Rents rose last year by 4% for existing properties and 6% for new-builds, with the increases on new leases being even higher in the biggest cities, at 6% and 9% respectively, according to BNP Paribas Real Estate.
The structure of German society makes the problem even more acute: Germany has a 29.4% share of single households, surpassed in Europe only by the Finns, at 38.4%.
