Within the EU, Germany occupies last place when it comes to home ownership rates. According to the last survey from 2022, 46.7 percent of people reside in Germany in their own apartment. In Italy, it is 74.3 percent, in the leader Romania it is 94.8 percent. 

How can it be that one of the poorest countries in the EU has the highest home ownership rate? And what are the reasons for that “denial of ownership” in Germany? Let’s first look at the figures for the EU as a whole.

Expensive Cars? Yes. Your Own Place? No. 

To outsiders, Germans can be strange buyers. They spend a lot of money on cars, but a property that outlives several cars is considered a hindrance. 

The DIW believes the equity ratio in Germany of at least 20 percent plus the additional acquisition costs of up to 15 percent were the reasons for the refusal to buy in this country.  That would be obvious at first glance, if it weren’t for the other states in the European Union. The banks there are often just as restrictive.

In Italy, the broker’s commission amounts to three to five percent of the purchase price plus 22 percent IVA, or VAT. Notaries charge between 1.5 and 2percent for their work. The calculation of the property transfer tax is slightly different there, but in the end, it is higher than in Germany. 

The property transfer tax in Germany currently rests at 9 percent. The bottom line is that the additional employment costs in Italy exceed those in Germany.  The banks also expect 20 percent equity capital for financing. The DIW’s argument falters.

Things get even more exciting when we look to Croatia. The necessary equity ratio for external financing is between 30 and 50 percent.  This is even higher than Germany’s standards

So that can’t be the problem. Is there a specific cultural reason? Well…

The tendency to rent results from the social development of the 1970s. The industrial revolution swept Germany, thousands of people moved from the countryside to the cities to work in the factories. Cheap housing was needed and the functional yet desolate tenements were born. This tradition has become established in Germany. Rent has been a tradition ever since.

Even though there was a similar situation in Great Britain, the deregulation of tenancy law in the 1990s led to the British rushing out of rented apartments and into home ownership. They wanted to be on the safe side.