The number of households in Germany living in owner-occupied housing is in continuous decline. This finding comes from a current housing market study by the Pestel Institute. The study, titled "Social Aspects of Homeownership", was commissioned by the 'bauen – wohnen – leben' foundation, a corporate foundation of Bausparkasse Schwäbisch Hall. According to the institute, the homeownership rate in Germany currently stands at just 43.5 per cent, the lowest value in the last twenty years. This places Germany at the bottom end of the scale in comparison with other EU countries.
Matthias Günther, head of the Pestel Institute, emphasises that the hurdles to acquiring homeownership have risen significantly. Households with lower and middle incomes are increasingly facing difficulties financing a house or a flat. Even in regions where purchase prices are stagnating or falling, it is barely possible for dual-earner households with average incomes to acquire homeownership. Günther also criticises current subsidy policies: the federal government has drastically reduced subsidies for homeownership, while opportunities for depreciation and deducting loan interest still exist in the rental housing sector. This leads to a considerable imbalance, which he describes as discrimination against homeownership acquisition.
Demand for a "Federal Homeownership Plan"
In view of this development, the Pestel Institute proposes a "Federal Homeownership Plan". This plan should define quotas as targets for future homeownership development in Germany, in order to prevent further neglect by current and future federal governments. The aim is to stop and reverse the downward trend of the homeownership rate. Specifically, it is demanded that at least 200,000 additional households per year should be given the opportunity to acquire owner-occupied housing for the first time. This would gradually increase the homeownership rate by approximately 0.3 percentage points per year and prospectively reach a rate of 50 per cent.
Matthias Günther clarifies that this is not exclusively about new builds; the acquisition of existing flats and houses is also part of this strategy. In the long term, Germany should become a "country of owners rather than renters". Mike Kammann, Chairman of the Board of Trustees of the Schwäbisch Hall 'bauen – wohnen – leben' foundation and CEO of Bausparkasse Schwäbisch Hall, adds that a higher ownership rate of 50 per cent and more, as exists in countries such as Austria, the Netherlands, or Sweden, would lead to greater social stability. Furthermore, an increase in homeownership would relieve the strained rental market. The declining homeownership rate is interpreted as an alarm signal that the state should not ignore.
Homeownership as a social issue and old-age provision
According to Matthias Günther, housing has long since developed into a social issue. The difficulty for broad sections of the population, who despite full-time employment cannot financially access homeownership, generates discontent and exacerbates inequality in wealth distribution. The "nest-building generation" is particularly affected, as almost three-quarters of 25- to 45-year-olds live in rented accommodation and homeownership often remains out of reach for them. Mike Kammann speaks of a "generation rent" whose situation urgently needs to be addressed by politicians. He points out that homeownership, even with average incomes, is often only possible through family support, such as an early inheritance, which is not in the overall public interest.
Moreover, homeownership, according to the Pestel Institute, represents a crucial component of old-age provision. Rising rents are increasingly burdening senior households and can push older people into old-age poverty. Günther describes old-age poverty as tenant poverty, as declining pension income meets rising housing costs in old age. The number of elderly people dependent on basic social security has more than doubled in the last twenty years. Kammann therefore calls on the federal government to make the promotion of homeownership a priority of its housing policy. Housing should not be a luxury, and people with average incomes must be given a realistic chance of homeownership, which also includes the early willingness to build up equity.
