Why do Germans prefer to live in rented apartments and houses?

Nowadays almost 49% of Germans rent housing, since they do not want, or do not have the means to purchase an apartment or house. There’s history to such trends in the country. Initially, the number of social rental housing in Germany significantly exceeded the number of properties for sale. After the Second World War, the country did not have enough funds to allocate them to the construction sector. Therefore, it was decided to increase funding for this sector through rent.

Despite the fact that a lot of time has passed since then, the trends in the population have not changed much. Over the past 20 years the number of homeowners has increased by only 10%, despite the fact that the country is the economic center of Europe, and real estate is relatively inexpensive.

Reasons for the stable popularity of rental housing in Germany

Despite the fact that the average price of an apartment in Germany is equal to the sum of salaries for 5 years, many are not ready to pay that price. In addition, prices vary greatly from region to region. In rural areas, housing can be bought 30% cheaper than in the capital. It is Berlin that is the leader right now in the number of rented objects - more than 80%.

However, it should be noted that recently the Germans have begun to purchase more housing due to the rise in rental prices. Now, even in large cities in the country, it is cheaper to buy your own apartments than to pay rent for several years.

Other reasons include:

• a wide variety of social housing, which can be rented at an affordable price;
• laws that protect tenants;
• long-term price stability.

Also, in some regions of the country there is a program according to which the rental price is determined solely by the living conditions and the age of the building. This allows tenants to choose both expensive comfortable properties and affordable ones.

It is also worth considering the fact that when purchasing a home in Germany buyers might face some hidden costs. For example interest on mortgage payments. In most European countries they are deducted from taxes, however this is not the case for Germany.

What are the predictions for the future of the market in Germany?

According to experts, in the near future the number of those wishing to acquire housing may grow. The main reason for this is low interest rates, which allow borrowing without overpaying too much.