Table of Contents:

1. Renting or buying: Which is more rewarding? 1.1 Current rent rates 1.2 Conclusion: a matter of living circumstances

2. This is how Germans like to live 2.1 Detached home, flat or micro-apartment? 2.2 Period building, new-build, sustainability? 2.3 Office in your private home?

3. My home is my castle: How to make your home look nice 3.1 Let your home go green: plants for everyone 3.2 Light up your home: picking the right kind of lamp 3.3 Let your place be smart: innovative technology

4. Carefree living: How to cut costs

5. Conclusion

Renting or buying: Which is more rewarding?

If you answer the question by citing financial aspects only, owner-occupancy will come out on top. Because if you own residential property and live in it, too, you benefit from a variety of cost advantages, according to the ACCENTRO Homeownership Report 2021, aside from not having to pay rent: Buying real estate is considered a very hands-on way to invest your money—especially in times like these—and a great way to build wealth. Residential property prices in German cities have followed an unchecked upward trend for years, so that you will almost certainly be able to sell your house or apartment for more than you paid for it.

Particularly when considering retirement and the financial planning for it, buying property has distinct advantages. Once your home is paid off, your overhead during retirement will be down to service charges and maintenance costs. Compared to the costs of renting, owner-occupancy comes with substantial cost advantages that will contribute in no small way to your pension plan.

From a financial angle, the acquisition of residential property and subsequent owner-occupancy are by all means rewarding. However, it is not necessarily the optimal solution for everybody. Because rental apartments have perks of their own: Especially for those who appreciate freedom and flexibility and whose plans includes places other than Germany, tying yourself to an apartment for longer than the notice period of three months makes little sense.

But not just your own living circumstances might change. Sometimes external factors in the immediate surroundings can change as well, such as noisy neighbours moving in or large-scale construction works starting next door. If you feel that changed conditions are more than you are willing to accept, it is relatively easy and uncomplicated for you as tenant to opt for a change of scene by moving elsewhere.

Renting can even have financial advantages: Living in a rented home requires no equity capital, and there is no need to borrow – or at least not to pay off a mortgage. Many are so wary of the prospect of having to make payments over years and decades that the long-term financial benefits of homeownership pale by comparison. Moreover, you do not bear sole financial responsibility for your dwelling as a tenant. In most cases, the costs of a property’s upkeep, maintenance and repairs fall on the owner.

Detached home, flat or micro-apartment?

In 2019, the number of households in Germany totalled 41.5 million, home to 82.8 million household members. Statistically speaking, this translates into 1.99 persons per household in 2019, a figure that continues the trend toward ever smaller households which started as early as the 1950s. In fact, the single-person household has been the most common residential format in Germany for the past four decades, and even the number of two-person households is in decline. The number of multi-generation households is plummeting – their share of the total now down to 0.5 percent.

By the end of 2020, the total number of apartments in Germany equalled 42.8 million. Slightly more than half of these were located in multi-family houses of three to ten units. Roughly a quarter of all Germans lived in larger blocks of flats, one third in single-family detached homes or semi-detached units. The average dwelling size was 94 square metres while the number of rooms was 4.4 on average, so that each member of the household occupied an average space of 44.6 square metres.

The costs of residential accommodation can be broken down to a simple formula: the larger, the more expensive. As a result, a new residential format has been gaining ground in urban areas, especially among young people: Living on very small footprints in so-called tiny houses or micro-apartments. Apartments or houses of this type require extremely careful planning because their inhabitants usually have only 15 to 45 square metres at their disposal. But in combination with a minimalist lifestyle, it is a forward-looking concept – especially in times of growing rent rates and housing shortages.

Period building, new-build, sustainability?

Another question that presents itself when you start looking for a home is: period building or new-build unit? In terms of sustainability, the answer is unambiguous: As handsome and stylish as period buildings with their tall ceilings and single-glazed wood-frame windows may be – period buildings tend to have a sustainability and energy efficiency profile that can be three times worse than modern new buildings.

While this has consequences for the heating bill of the individual resident, it should also be in the collective interest of society to make buildings as carbon-neutral as possible. After all, the climate and its progressive change affects all of us. To achieve the climate protection targets of the German Government, the buildings sector will have to play a key role. The German housing stock is supposed to be carbon-neutral by 2050. According to the ACCENTRO Homeownership Report 2021, it is a feat that would require 1.3 trillion euros in investments. Property owners have particularly sound reasons to look into the possibilities and advantages of energy refurbishments. Even the furnishing and interior fit-out of your apartment present opportunities to enhance sustainability, e. g. by opting for “green furniture” and re- or up-cycled home decor.

My home is my castle: How to make your home look nice

Speaking of the coronavirus pandemic: During the past two years, the majority of people spent more time within their own four walls than rarely ever before. Without the option to go to the office, cinema, restaurant, gym or indeed anywhere else, they found themselves spending inordinate amounts of time at home. Never before had it been as important to actually feel at home in your quarters as during the global pandemic. Predictably, the situation triggered a trend to redecorate the home to ensure a feel-good ambience.

Light up your home: picking the right kind of lighting

Lamps are a touchy subject: It is not uncommon to find naked light bulbs dangling from the ceiling weeks and months after the move-in date because the new residents have been unable to find just the right sort of lamp.

A sensible way to start when hunting for the right lighting is to clarify what kind of light you would like in each room, and what a given source of light is expected to do. Generally, it is safe to say: Warm and indirect light makes rooms cosier and slightly smaller than they are, whereas bright and direct light will open rooms up while giving them a cooler ambience. A good idea for living rooms and bedrooms, for instance, is to combine several sources of light, such as floor lamps, wall lights, side lamps and fairy lights. In the study, it can make sense to install a ceiling light with daylight function to ensure you have the optimal lighting conditions for reading and working.

Speaking of natural light: If you crave more natural light in your home, a clever arrangement of mirrors throughout your apartment will often brighten it and even make it look larger.

But more and more lights now come with a so-called daylight mode, which simulates the colour temperature of natural light. Another feature of modern lamps is a dimmer that lets you control the brightness to suit the situation. This can come in handy in the case of an eat-in kitchen, for instance. Here, you will want bright light for preparing, cutting and cooking but may prefer a more subdued light and a cosier atmosphere when sitting down to have dinner.

Let your place be smart: innovative technology

But not just lights offer more and more features. In the case of so-called smart homes, state-of-the-art technology enhances your home amenities and makes your day-to-day life easier. The centrepiece of any smart home is the control centre, operated via smartphone, tablet or desktop computer. Smart devices can be wirelessly connected to your smartphone and operated on the go, any time of day.

How exactly does smart home technology make your life easier? Imagine you are running late one morning but still find your coffee in the kitchen just the way you like it. A pre-programmed and smart fully automatic coffee maker will serve your favourite hot beverage right on time. A motion detector in the hallway will note that you are about to leave the house and will open the linked garage door for you. If you were in a rush and forgot to turn off the light, the heating or the radio, just use your smartphone to do so later. Just before leaving the office, you start the washing machine, lawn mower and vacuum cleaner at the touch of a button so as to return to a tidy home after a busy day at work. In the same way you turned off the lights and the heating from afar, you now turn them back on when on your way home, returning to a heated, well-lit place.

Carefree living: How to cut costs

To get back to our opening remarks: Regardless of whether you rent or owner-occupy your home, housing always generates costs, and often higher costs than we expected. It always makes sense to check where and how you can save on the overhead at home.