German Savings Ratio Is High, Homeownership Rate Remains Very Low


July 2020

Compared to other countries, private German households show a higher-than-average savings ratio. A comparison of the 18 OECD member states by the IW Economic Institute found that Germans tend to consume only 89 percent of their disposable income – whereas the median value across all countries studied was 95 percent. Moreover, the German savings ratio is relatively stable and has more or less maintained the same level since 1995, whereas the savings ratios in the United States or in Japan, for instance, declined over the same period of time (source:

The reasons that motivate Germans to set money aside are long-term in nature. According to a survey commissioned by the VPB Association of Private Building Societies, more than half of all Germans are saving up against their retirement. Another major reason for German households to save up money is homeownership: 39.3 percent of the respondents stated that they are saving their money with a view to buying or refurbishing homes of their own.  

Many Tenants Willing to Cut Back on Consumer Spending for the Sake of Homeownership

Despite the high savings ratio compared to other countries, the homeownership rate in Germany is very low, relatively speaking. Only 46.5 percent of all German households live within their own four walls (source: It is one of the lowest rates anywhere in Europe, and compares to homeownership rates of 82 percent in Norway, 77 percent in Italy and 58 percent in France – even the latter figure being substantially higher (source:

Quite obviously, there is no lack of resolve to save up toward the acquisition of a home. This is confirmed by a YouGov poll conducted this year, which suggests that only 13 percent of the German tenants are unwilling to limit their consumption in order to save up the capital needed to buy property. Indeed, half of all tenants would prefer homeownership (source:  

Home Owners Six Times Wealthier than Tenants

How perfectly sensible this desire is demonstrates a wealth comparison between tenants and owners that the European Central Bank undertook recently. It revealed that homeowners in the eurozone were six times wealthier than tenants. While the latter had only an average of 51,500 euros to their name, the average wealth of homeowners amounted to c. 300,000 euros (source:

Meanwhile, the wealth inequality keeps intensifying along the same lines. Homeowners strongly benefited from the positive performance of residential real estate in recent years. Those who own no property missed out on this capital growth opportunity.

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