Homeownership remains the best form of retirement planning. This is the conclusion reached by the fifth edition of the ACCENTRO Housing Cost Report. Almost everywhere in Germany, it is still more affordable to buy residential property than to rent. On average across Germany, the cost advantage of homeownership stands at 48.5 percent. Even in major German cities, where purchase prices have risen particularly sharply in recent years, homeownership remains more cost-effective. In Berlin, owning a home is currently about 35 percent cheaper than renting; in Hamburg, for example, the figure is 43 percent. This is due to a combination of rising rent prices and the still very favorable conditions in the mortgage market.
The latest report identified several reasons why homeowners pay less for housing than renters. Due to the sharp drop in mortgage interest rates, the running costs for homeowners—which were already very low—have fallen even further. Although purchase prices have continued to rise, they have not done so to such an extent that they could outweigh the savings resulting from lower interest rates. Renters do not enjoy this interest rate advantage.
The conclusion is therefore that policymakers should continue to support access to homeownership. To help people raise the necessary down payment for home ownership, possible policy measures could include, for example, government-guaranteed subordinated loans and a reform of the real estate transfer tax. This would primarily improve access for households with low and moderate incomes. The study highlights that private landlords come from all segments of the population, including households with lower incomes.