Homeownership remains more affordable than renting. This is the conclusion reached by the sixth edition of the ACCENTRO Housing Costs Report. Almost everywhere in Germany, it is still more affordable to buy residential property than to rent it. On average across Germany, the cost advantage of homeownership stands at 56 percent. In 399 of 401 German districts, homeowners live more affordably than renters, and the same is true in major cities. In Berlin, homeownership is currently 40 percent more affordable than renting, representing the smallest difference among major cities. Cologne leads the way with more than 65 percent. The combination of rising rent prices and favorable mortgage conditions is reinforcing this trend.
The latest report identifies several reasons why homeowners live more affordably than renters. The drop in mortgage interest rates continues, further lowering running costs for homeowners. The savings from low interest rates also help offset rising purchase prices. Renters do not enjoy this interest rate advantage.
Homeownership has gained additional appreciation during the COVID-19 pandemic, driving up demand. As a result, the recommendation remains that policymakers should continue to support access to homeownership. Furthermore, the required down payment remains the greatest obstacle to homeownership. Instruments such as government-guaranteed subordinated loans and reductions in real estate transfer tax could be utilized here. The study emphasizes that buyers should be relieved of the burden of ancillary purchase costs in particular, as these costs are usually the primary factor driving the increased down payment requirements.