Dream of Home Ownership: Every Third Tenant Can afford a Home
"At home it is the most beautiful", it is said, but statistics show that a large proportion of Germans live for rent. And that, although currently the real estate fever is rampant. The fear of inflation, which should destroy the savings, made sure that the Germans invested their money back into real estate after years of restraint. In view of the historically low interest rates, every German should now plunge into an offer, it is believed.
Analyzes of German dwelling say that the typical dream home of the German citizen looks like this: it has a beautiful garden, is not too far from essential points such as work , School and shopping, and costs no assets. The dream of owning a home means to the consumer that he is his own master, no longer having to pay rent, not being bothered by complaining neighbors disturbed by the music, and much more. This prospect attracts the Germans as the honey attracts the insects. One could argue that this enthusiasm means that houses are mushrooming, but they do not.
According to the Bundesbank, real estate in some major German cities and their surroundings is about 20 to 25 percent overvalued. This is exactly what a report by the Federal Association confirms: According to this, real estate assets at the end of 2013 amounted to 5.5 trillion euros, an increase of ten percent in just two years. The rising real estate prices in many regions make the Germans richer - on paper at least. This theoretical value is realized only when the Germans decide to sell. They do so in many regions, namely where the demand is high.
The Federal Republic: the undisputed tenant country
Many people dream of their own home. According to experts, the purchase of real estate pays off in many places, especially in times of low interest rates. According to data from the European Union, of the 40 million German households, only 53 percent live in their own house. In recent years, this ratio has not changed practically. Germany is thus a tenant nation. A stark contrast compared to other countries like Romania, where more than 96 percent live in a home. Nevertheless, Germany is not at the end of the chain in European comparison. In Switzerland, for example, more than half of the population lives on rent, just as in Sweden, Denmark and the Netherlands.
Experts believe that statistics could be different. According to them, every third tenant would have enough money to finance a home. This Allensbach and Institute Prognos have calculated for the Association of Sparda Banks. For a long time, however, there were tax advantages that favored renting enough that buying a property was not worthwhile. Exactly what is changing at this moment: In 2009, the purchase of houses in just seven percent of all German counties economically worthwhile than the rents - in 2013, the percentage is already 27. The home purchase or construction in the East is particularly attractive - in the homeowner- Bavaria and Baden-Wuerttemberg, on the other hand, are less so.
Overall, it is still surprising that Germans no longer opt for home ownership, as the real estate is considered to be a good hedge against inflation and generally meaningful retirement provision. On the other hand, the balance between ownership and rented housing means a stable real estate market. Housing prices fluctuate very little in this country. Consequently, there are no real estate bubbles, as was the case in the US or Spain.
Of course, there is no guarantee that interest rates will be as low as they are today in ten or twenty years. But that does not mean that you should overturn the real estate purchase or construction. However, those who belong to the third of the tenants who have sufficient reserves, should think twice, whether now is the right time to realize the dream of owning a home. At this time, not only the interest rates are low, but also the offers of building societies such as www.lbs.de are particularly attractive. In addition, there are numerous funding opportunities available from the state, the states and municipalities.
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