Buying housing for German families has become more affordable, but the market is still focused on renting.
According to a report published last week by the German Economic Institute in Cologne, the average German family will have to spend 40% of their income on a mortgage to buy an apartment, which is below the maximum of 45% recorded in 2022.The improvement in the situation is due to falling interest rates and higher wages.
Nevertheless, the figures are far from the figures of five years ago. Five years ago, the average family of four had to spend less than 30% of their net income on a mortgage.
Rents in Germany are steadily rising, but still account for only 33% of the income of a family of four, in which one person works full-time and the other part-time. Thus, it is not surprising that the majority still leans in favor of renting rather than mortgages.
The trend suggests that in Germany, a country where only less than half of the population owns their own housing, little will change in this regard in the near future.
Although further interest rate cuts by the European Central Bank should improve housing affordability for the population, it is unlikely that indicators will soon return to levels seen in past decades.
Source: Business Times
