Press Release

ACCENTRO Housing Cost Report 2022: Homeownership over 59 Percent Cheaper than Renting


June 2022

  • Owner-occupiers’ housing costs stable

  • Splitting agent’s fee has boosted cost advantage of homeownership

  • Major price drops are therefore not to be expected in the short term

Berlin, 08 June 2022 – Buying residential property in Germany was 59.2 percent more affordable than renting in 2021, this being the nationwide average. In other words, the cost advantage of occupying an ownership apartment over living in a comparable rental flat increased by another three percent since 2020 – which is the upshot of the ACCENTRO Housing Cost Report in its seventh edition, once again compiled in collaboration with the German Economic Institute (IW). According to the survey, owner-occupiers pay less for housing in 399 out of 401 districts in Germany, including in the metropolises. They pay an average of 4.21 euros per square metre compared to an average new-tenancy rent of 10.30 euros per square metre for a comparable apartment. That owner-occupiers’ housing costs declined by 0.11 euros year on year whereas prices for ownership apartments went up by ten percent during the same period of time is explained, according to IW, by the simultaneous surge in new-tenancy rents and the moderate interest rate development in 2021 – effectively lowering even the opportunity interest rate. Had the opportunity interest rate remained stable, home buyers would have faced owner-occupiers’ housing costs of 4.76 euros per square metre and thus an eleven-percent increase. Another factor that has eased the load for home owners was the decision, enacted in 2021, to split the agent’s fee between seller and buyer. For the purpose of the Housing Cost Report, now in its seventh edition, the IW Economic Institute compares the housing costs paid by owner-occupiers with those paid by tenants; the rents and owner-occupiers’ housing costs were analysed for all 401 of the country’s rural and urban districts. The calculation is based on the net base rent versus the owner-occupancy costs which break down into the purchase price, the incidental acquisition costs, the mortgage interest and the loss of interest (opportunity interest) on the equity employed, along with reinstatement costs and depreciation. In its latest survey, the IW institute identified several reasons explaining why homeowners pay less for housing than tenants. As a result of the still rather affordable mortgage interest, the anyway very low costs for homeownership have decreased even further. Although selling prices have continued to go up, the price growth is more than offset by the savings implied by the interest rate cuts. Tenants simply lose out on this interest advantage. “Our ACCENTRO Housing Cost Report 2022 shows that 2021 was an excellent year for home buyers in Germany. The cost advantage for owner-occupiers continued to rise, if at a moderate pace, and is now close to 60 percent, implying an enormous gap. Considering the high property prices and the rising rent levels, homeownership is still the optimal private retirement plan,” elaborated Lars Schriewer, CEO of ACCENTRO Real Estate AG. Owner-Occupiers Better off even in Metropolises

Especially in rural areas and regions with low or medium selling prices, the owner-occupiers’ housing cost advantage remained rather conspicuous in 2021. For instance, the greatest cost advantage at 82.9 percent was registered in the rural district of Sömmerda in Thuringia. But even in the German metropolises, which are known for their comparatively low cost advantage for owner-occupiers, homeownership presented major economic benefits. The cost advantage of metropolitan owner-occupiers over tenants ranged from 47.3 percent in Berlin (2020: 40.8 percent), to 53.7 percent in Hamburg (2020: 50.0 percent), 54.9 percent in Munich (2020: 53.4 percent), 59.3 percent in Stuttgart (2020: 57.9 percent), 63.7 percent in Frankfurt am Main (2020: 60.4 percent), 65.7 percent in Düsseldorf (2020: 64.1 percent), and all the way to 66.2 percent in Cologne (2020: 65.0 percent). “Even in the metropolises, the cost advantage of owner-occupiers over tenants continued to increase. So, going for homeownership made sense even in the country’s largest cities. At the end of the day, homeowners simply have more money in their pockets,” Schriewer elaborated.

Cost advantage of owner occupancy

Gross initial yield

Gross rent multiplier

Rent rate

Purchase prices, €/sqm

Berlin47.3 % (2020: 40.8 %)2.6 % (2020: 2.7 %)38.5 (2020: 36.4)€13.10 (+2.8 %)€6,029 (+8.7 %)
Düsseldorf65.7 % (2020: 64.1 %)4.0 % (2020: 4.3 %)24.8 (2020: 23.2)€14.80 (+2.8 %)€4,409 (+10.0 %)
Frankfurt am Main63.7 % (2020: 60.4 %)3.8 % (2020: 4.0 %)26.5 (2020: 24.8)€19.60 (+2.6 %)€6,222 (+9.4 %)
Hamburg53.7 % (2020: 50.0 %)2.9 % (2020: 3.1 %)34.5 (2020: 32.0)€17.60 (+3.9 %)€7,270 (+12.2 %)
Cologne66.2 % (2020: 65.0 %)4.1 % (2020: 4.4 %)24.5 (2020: 22.6)€15.60 (+3.4 %)€4,581 (+11.6 %)
Munich54.9 % (2020: 53.4 %)2.9 % (2020: 3.2 %)34.1 (2020: 31.7)€22.70 (+2.5 %)€9,285 (+10.4 %)
Stuttgart59.3 % (2020: 57.9 %)3.3 % (2020: 3.6 %)30.1 (2020: 27.9)€16.80 (+2.5 %)€6,074 (+10.5 %)

Sources: German Economic Institute (IW); vdpResearch (2022)

Interest Rate Reversal Hits Residential Property Market

Coming on the heel of the pandemic, the war in Ukraine is yet another event with downstream effects for the German real estate market. In addition to the brisk rise in energy prices and the high inflation, initial interest rate moves by the ECB are to be expected before the end of this summer. The interest rate reversal has already hit the real estate market, with interest expenses rising quickly. The survey’s authors believe that the effect will be reflected on the market in the form of rising owner-occupiers’ housing costs in 2022. Price drops, by contrast, are not to be expected in the short term. “So far, the market has coped splendidly with the rise in interest rates. Increasing construction costs and a still growing demand for that rare commodity called ownership apartment have stabilised the market,” elaborated Prof. Dr. Michael Voigtländer from the German Economic Institute. “That said, rising interest levels will significantly lower the cost advantage of owner-occupiers.” Depending on the outcome of the war in Ukraine and the future course of the coronavirus pandemic (especially in Asia), the German Economic Institute expects the inflation to decline again, which in turn would send interest rates back down. In addition, it is safe to expect real wages to go up, at least in the medium term, which would also cause the affordability of homeownership to bounce back. The ACCENTRO Housing Cost Report compares three different interest rate scenarios. In the scenario assuming a building finance rate of two percent, owner-occupiers’ housing costs would rise by 66 percent up to 6.97 euros per square metre. An interest level of 2.5 percent would drive owner-occupiers’ housing costs up to 8.55 euros, more than doubling them, while an interest rate of three percent would cause them to rise by 141 percentage points, up to 10.12 euros. It should be remembered that the underlying assumption is a stable selling price level – yet the emerging price growth in early 2022 points to further increases in owner-occupiers’ housing costs by another eight percent to 7.32 euros (under the 2-percent interest rate scenario), another ten percent (2.5-percent interest) to 8.97 euros, or even by an extra twelve percent (3-percent interest) to 10.63 euros. “Owner-occupiers’ housing costs will most likely go up following the interest rate reversal, and this would diminish the cost advantage of owner occupancy. Over the past 20 years, the average interest level was 4 percent, which is significantly higher than today’s level, and still the real estate market had its appeal. The main thing when buying property is to maintain a long-term perspective, and in cities all over Germany, the long-term outlook continues to be extremely bright because of the demographic growth,” as Lars Schriewer explained. “However, owner-occupiers’ housing costs stay well below the anticipated new-tenancy rents, even in the most drastic interest rate scenario – so, buying is still more affordable than renting.” Owner-Occupiers’ Housing Cost Advantage Remains Intact in Most Parts of Germany, Despite Rising Interest Rates

The German Economic Institute (IW) assumes in its analysis that even an interest hike from currently two percent all the way up to three percent would leave the owner-occupiers’ housing cost advantage intact in the suburbs of the metropolises and major cities and even elsewhere in Germany. Less resilient are the “Big 7” cities because their neutral interest rate (at which new-tenancy rents and owner-occupiers’ housing costs are in balance) equals 2.8 percent, slightly below the interest level of three percent in IW’s most drastic interest rate scenario.

Type of region

Neutral interest rate (scenario calculation 2022)

“Big 7” cities2.8 %
Suburbs, “Big 7” cities3.6 %
Major city3.1 %
Suburbs, major city3.5 %
Other3.7 %

Source: German Economic Institute (IW)

“In addition to short supply, the rise in interest rates presents prospective buyers with a second bottleneck. The Federal Government should make the homeownership more affordable for first-time buyers by providing relief against the incidental acquisition costs,” Lars Schriewer demanded. “The price growth alone has quickly driven up revenues from the real estate transfer tax for many years now, yet municipalities keep raising their rates. It actually presents a huge opportunity for tax relief. Conceivable options include an allowance or some other form of relief against the incidental costs.” “We therefore reiterate our demand that the body politic should do more to ease the access to homeownership. There are numerous examples from other countries in Europe, such as the United Kingdom and Belgium, where the real estate transfer tax is waived for first-time home buyers. Moreover, since the necessary equity capital presents the most common obstacle to homeownership, the latter could be made more attainable for low- to middle-income households by offering government-guaranteed subordinated loans, or by reforming the real estate transfer tax,” said Voigtländer. To download the (German version of the) ACCENTRO Housing Cost Report, click here: About ACCENTRO Real Estate AG ACCENTRO Real Estate AG is Germany’s market leader in housing privatisations. In addition to its home market of Berlin, the company focuses on auspicious metro regions such as Hamburg, Rhine-Ruhr and Leipzig. In its Privatisation business unit, ACCENTRO retails apartments from its proprietary portfolio to owner-occupiers and buy-to-let investors or—bundled into portfolios—to institutional investors. In its Services & Ventures division, ACCENTRO sells apartments on behalf of investors and property developers – including through equity investments within the framework of joint ventures. ACCENTRO Real Estate AG is listed on the Prime Standard segment of the Frankfurt Stock Exchange (German securities code number WKN: A0KFKB, ISIN: DE000A0KFKB3). About the German Economic Institute (IW) The Cologne Institute for Economic Research (IW) is a private economic research institute committed to a liberal economic and social order. Among the members of the registered association are about 110 German industry and employers’ associations as well as individual companies. Project partners include foundations, industry associations and public-sector institutions above all.

Press and Public Relations Contact:

Jasper Radü


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10789 Berlin



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