Many young people dream of owning their own house or apartment. They are also prepared to impose restrictions.
More than half of younger Germans are prepared to limit themselves personally and rethink their ideals when purchasing a property. This is the result of a representative survey commissioned by BHW Bausparkasse, for which the market research company Yougov surveyed 2,063 participants under the age of 40.
Every second person between 18 and 39 is saving for home ownership. 80 percent of those surveyed are willing to make restrictions in order to be able to afford a property. 33 percent would reduce their personal expenses for things like traveling, buying a car or hobbies.
Young buyers are also willing to compromise when it comes to the property itself: around a quarter of them would accept a smaller property or buy an old building that would first need to be converted or modernized. Since September 2024, KfW has been rewarding such commitment through the “Young Buys Old” funding program. You can read here how high your income can be.
However, 63 percent of 18 to 39 year old potential owners also expect support from their family. Those surveyed most often expect their relatives to help with building walls, laying tiles or painting work (22 percent). 18 percent each hope for a gift or inheritance and an interest-free or cheap loan from the family.
“The starting conditions for buying property are very different for young people,” says Dietmar König, spokesman for the board of BHW Bausparkasse. “But if you work consistently towards your own property and remain flexible, you can significantly improve your chances.” Government funding programs such as the housing subsidy help to build equity and thus make it easier to own your own property. “Young people shouldn’t miss out on these financial gifts,” said König.
The development of the real estate market itself also gives cause for optimism. As the employer-related Institute of the German Economy (IW) in Cologne reports, your own four walls are more affordable today than they were two years ago. And this despite the fact that purchase prices are currently rising again.
The reason: Households have more money in their wallets, partly due to the successful collective bargaining agreements. At the same time, interest rates are falling again, which simplifies financing. According to the IW housing index for the third quarter of 2024, a family of four with a median full-time and median part-time income currently has to spend 40 percent of their income per month on a home. At the end of 2022 it was still 45 percent.
The overall picture also includes the fact that property was significantly more affordable in the last decade. At the beginning of 2018, for example, a family had to spend less than 30 percent of their monthly household income on their own home. However, there will be no return to this level in the medium term, according to the IW economists.
