Germany’s Home Ownership Rate Lags Behind Other European Countries

You will be surprised which country in Europe has the highest home ownership rate. In Eastern European countries in particular, the majority live in their own homes. Find out why in this article. Where does Germany stand in a country comparison in terms of the home ownership rate?

Ranking of European countries by home ownership rate

Do you know how many Germans live in property? There are surprisingly few compared to other EU countries.

The ranking of the countries with the highest home ownership rate in Europe is as follows:

• Romania: With an exceptionally high home ownership rate of around 95% Romania comes first.
• Croatia: Croatia follows with a home ownership rate of about 90%.
• Lithuania: With a home ownership rate of around 89% Lithuania ranks third. This is mainly due to the favorable real estate prices and the promotion of home ownership through government programs.
• Greece: Greece has a home ownership rate of about 84%. Buying a home is very important in Greek culture and many families aspire to owning their own home.
• Spain: Here is the home ownership rate around 76%.
• Deutschland: Compared to the countries mentioned, Germany has a comparatively low rate of home ownership about 49% on.
• Switzerland: Compared to Germany, Switzerland has an even lower home ownership rate. This is included in Switzerland only around 42%.

What are the reasons why this rate is so low in Germany?

The majority of Germans live in rented accommodation, as real estate prices in Germany have risen enormously in recent years. Due to the rise in interest rates, it is difficult to finance an affordable property these days.

Other reasons why the home ownership rate in Germany is just under 49% (in large cities this number is well below this value)

• Attractiveness of the rental market: Renting an apartment in Germany is still significantly cheaper than buying a property. As a result, many people decide against buying their own property.
• High cost of building a house: Building in Germany is expensive, both in terms of land prices and construction costs. This presents a financial challenge that deters many potential buyers.
• Shortage of land: In many regions of Germany, suitable plots of land for residential construction are scarce. This leads to limited availability of building plots and increased prices.
• housing policy: Housing policy and the general conditions for housing construction in Germany also play a role. Some regulations and bureaucratic hurdles can make home construction difficult.

Even the purchase of a property as a capital investment is usually not profitable in the current market situation. On the one hand, this has to do with the high financing costs and on the other hand with the rental price brake. The purchase price factor is usually used as a guideline.

Compared to other European countries, Germany still has some catching up to do when it comes to home ownership

The ranking of the countries with the highest home ownership rate in Europe shows that Germany has a low home ownership rate in comparison. The reasons for this lie in various factors such as the attractiveness of the rental market, the high costs and the scarcity of land. Housing policy also plays an important role. Despite the desire of many people to own their own home, the hurdles in Germany are often high. It remains to be seen whether this situation will change in the future and whether home ownership will increase. It will be decisive for this how the interest rates for construction financing will develop in the next few years and whether real estate prices will fall.