As a result of rising wages, slightly fewer people in Germany are struggling to meet their housing costs. According to a survey by direct bank ING, around a fifth (22 percent) of participants find it “difficult” or “very difficult” to pay rent or property finance. This is a decrease of four percentage points compared to the previous year’s survey, which set a record since the time series began in 2013.
Property owners with financing in particular believe they are doing better, writes ING. In the survey, only 12 percent of homeowners with a mortgage found it “difficult” to cover their housing costs. In contrast, more than a quarter of tenants (26 percent) said it was “difficult” or “very difficult” to pay rent.
This is still the second highest share since the beginning of the time series, explained study author Sebastian Franke. “This shows that Germany is a country of takers. The home ownership rate of nearly 48 percent is the lowest in the EU. “
Only a few tenants were out of conviction
Table of Contents
According to the study, those who rent usually have financial reasons: 52 percent of tenants say they cannot afford to buy their own property. 7 percent could do that – but not in the area where they would like to live. According to this, very few people are tenants out of conviction, for example because they value flexibility and easier movements (12 percent) or they do not want to waste time doing repairs (10 percent).
However, the survey also shows that many people can pay the rent “easily” or “very easily”: around 40 percent said this in the representative survey, for which the research institute made an opinion Ipsos survey of 1,000 good people online.
Serious concerns about housing for children
Housing costs are also a concern for people when it comes to the next generation: More than 80 percent of respondents with children fear that housing may not be affordable or available for their children.
According to ING economist Franke, the proportion of people who have financial problems with housing costs could fall again in 2025 if wages rise. “At the current rate – as it was this year – that would be more attractive than a reason to be clear. “
Many people are struggling to meet their housing costs (archive photo). Photo: Monika Skolimowska/Deutsche Presse-Agentur GmbH/dpa
2024-12-01 05:17:00
#Survey #people #struggle #housing #costs
## German Housing Costs Ease Slightly Amid Rising Wages
**Expert Interview with Dr. Agnes Schmidt, Head of housing Research at the Institute for economic and Social Studies**
**World Today News:** Dr. Schmidt,recent data reveals that slightly fewer Germans are struggling to meet their housing costs. Can you elaborate on this trend and what factors might be contributing to it?
**Dr.Schmidt:** Indeed, the latest figures show a modest decline in the proportion of households facing hardship with housing expenses. While this is positive news, the situation remains challenging for many. The key driver behind this slight betterment appears to be the gradual rise in wages observed over the past year.
**World Today news:** How significant has this wage increase been, and what impact is it having on housing affordability?
**Dr. Schmidt:** the wage increases have been modest, generally within the range of 2-3% across various sectors. While not dramatic, this increase in purchasing power does allow some households, notably those on lower incomes, to allocate a slightly larger portion of their budget towards housing without falling into financial strain.
**World Today News:** Are there othre contributing factors beyond wage increases?
**Dr. Schmidt:** it’s also worth noting that the construction of new affordable housing units, while not at the desired pace, has contributed somewhat to easing the pressure on the market. Government initiatives aimed at promoting affordable housing, even though facing challenges, have had a small positive impact.
**World Today News:** Despite this improvement, housing affordability remains a significant concern in Germany. What are the major challenges you see ahead?
**Dr. Schmidt:** The existing housing stock, particularly in urban areas, is insufficient to meet the growing demand. Construction costs continue to rise, partly due to material shortages and inflation, which makes building new affordable housing even more challenging.
Furthermore, the growing trend of institutional investors acquiring residential real estate further drives up prices and rents, making it increasingly arduous for average citizens to access decent and affordable housing.
**World Today News:** what policy measures could be implemented to address these challenges effectively?
**Dr. Schmidt:** A multi-pronged approach is needed.first, we must significantly accelerate the construction of new affordable housing units through targeted government subsidies and streamlined planning procedures.
Second, stricter regulations on institutional investors are needed to prevent excessive market distortion and ensure a fairer distribution of housing opportunities.
Third, the promotion of alternative housing models, such as cooperative housing and co-living spaces, can provide innovative solutions to address affordability challenges.
**World Today News:** Dr. Schmidt, thank you for sharing your expert insights on this important issue.
**Dr.Schmidt:** It’s my pleasure. The situation is complex, but with the right policies and collaborative efforts, we can work towards ensuring that access to safe and affordable housing is a reality for all Germans.
