German homeownership rate plunges to 20-year low of 43,5%

Rents are high, finding a place to live is hard to come by and competition is increasing. The German housing market is under pressure, and now the number of people who own a home in Germany has reached the lowest rate in 20 years.

German homeownership rate the lowest in Europe

The rate of homeownership in Germany has now reached a 20-year low of 43,5 percent, according to Augsburger Allgemeine. In fact, the country’s homeownership rate now ranks the lowest among EU member states as the majority of residents opt to rent instead.

By comparison, homeownership is highest in Europe in Romania at 94 percent, followed by Slovakia (93 percent) and Hungary (92 percent). The European Union average sits at 68,4 percent homeownership.

The number of people who can afford to own a home in Germany has been in decline for several years. In 2010, the homeownership rate in Germany was 53,2 percent and dropped below 50 percent in 2021, according to Statista.

Why buying property in Germany is becoming unaffordable

The reason for Germany’s dropping rate of homeownership has been revealed in a study by the Pestel Institute. Study author Matthias Günther attributes the lack of property purchases to “high construction costs, increasing interest rates and flawed housing policies,” reports Augsburger Allgemeine.

Since 2000, the cost of building a block of apartments in Germany has skyrocketed by 160 percent. Even when the housing market experiences a drop in prices, “dual-income couples with average incomes are barely able to afford their own home,” explains Günther.

The group hardest hit by high housing prices are the younger generations, with almost three-quarters of 25- to 45-year-olds in Germany renting rather than owning a property.