The dream of owning your own house is more hopeless than it has been for a long time. You only have to open the newspaper or look it up on the Internet to see it. There you can find, for example, ads like this one: Four-room apartment with lawn patch in the Frankfurt area for sale, 125 square meters for 795,000 euros.
Birgit Ochs
Editor responsible for "Housing" at the Frankfurter Allgemeine Sonntagszeitung.
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If you want to buy this apartment, you need equity of over 200,000 euros alone. In addition, he would have to spend more than 3000 euros every month to pay off the loan and pay the interest, and all this for an apartment on the ground floor of a staid three-family house, not for a dream house with a garden.
But even such an object is unaffordable for most Germans. They just don't have enough money. Markus Grabka of the German Institute for Economic Research (DIW) sees this as a major problem. "Home ownership was a central promise of advancement in the Federal Republic of Germany," he says. "That's no longer true for a lot of people."
There are several reasons for this. Initially, interest rates were low for years, which drove up real estate prices. Those who had money preferred to invest it in houses and apartments instead of leaving it in the account and watching it lose value. Then, in 2021, in the wake of the Corona crisis, material and construction costs exploded. Suddenly, the house cost the builders much more than originally thought. Those who could not raise the extra money had to give up their dream. And finally, there was the Ukraine war and inflation.
To combat them, the European Central Bank raised the key interest rate, and since then lending rates have also risen. Now even more people willing to build and buy were forced to get out. They returned land they had acquired, broke off negotiations, cancelled notary appointments and stopped making plans. Many people still want to own their own homes, according to a survey conducted by Postbank Immobilien. But only five percent of those surveyed are sure that they will be able to fulfill it.
All of this used to be different. More Germans were able to afford their own property, even though the conditions were not exactly ideal even then. At the beginning of the seventies, for example, builders had to pay interest of 12 percent on their loan. For quite a while, it was still six to eight percent. Construction was carried out anyway.
Private wealth is simply not enough
One reason for this is that shoppers used to settle for less space. Forty or fifty years ago, people built houses with an average living area of 122 square meters. Today it is an average of 160 square meters. So there is as much space as in a small single apartment. This increases the construction price. In the past, too, many people were willing to do more without. A holiday for the young family, for example, was out of the question in the years after buying a house. People stayed at home, worked on the roof or tended the garden.
Consumer researcher Andrea Gröppel-Klein from Saarland University points out something else. "Life had a completely different way of planning," she says. Fifty years ago, people began to work and start families much earlier. So if you bought your own home, you were only in your mid-twenties or early thirties. This had an advantage for the buyers: they had more time to pay off their debts. In addition, people used to be more likely to buy cheaper residential property in the countryside, because that's where they worked.