Press Release

ACCENTRO-IW Housing Cost Report 2017 – Buying a Home is 33 Percent more Affordable than Renting


July 2017

Berlin, 11 July 2017 – This is the gist of the 2017 Accentro-IW Housing Cost Report: Buying residential property in Germany remains much more affordable than renting, and this is true nationwide. However, the number of first-time buyers has dropped year on year. For young families, it is getting harder to buy a home of their own, and indications are that their options keep narrowing. When looking at Germany as a whole, the survey findings suggest that buying a home is roughly 33 percent more affordable on average than renting. This is down from a 41 percent cost advantage as recently as 2016. For the nationwide coverage of the 2017 Housing Cost Report, the rents and owner occupiers' housing costs in all 401 of Germany’s counties and independent towns were analysed. The report was compiled by the IW Economic Institute in Cologne under the scientific direction of Prof. Dr. Voigtländer on behalf of ACCENTRO Real Estate AG.

“Until a few years ago, it was generally assumed that social security is a given. Today, retirement planning has become the responsibility of the individual. So the significance of homeownership for the generation of those now 35 years old can hardly be overestimated. The Account IW Housing Cost Report has documented that it is more affordable to buy than to rent. At the same time, the socio-economic analysis of the survey tells us that today’s buyers tend to be childless couples with double income around the age of 48, rather than young families with children. To support precarious households as well as young families, the adverse developments of recent years, such as the rise in incidental acquisition costs, need to be rolled back. Steps in the right direction such as a waiver of the real estate transfer tax for first-time buyers could seriously ease the challenge of retirement planning for this generation,” elaborated Jacopo Mingazzini, the CEO of Accentro Real Estate AG.

Cost Benefits of Owner Occupancy Higher in Northern than in Southern Germany – the National Average being 33 Percent

The costs of owner occupancy have steadily declined since 2008. Only for the past two quarters have they been going up again. Still, the acquisition of an existing property remains roughly 33 percent more affordable on average across Germany than renting a comparable residential unit on a new lease. As recently as 2016, the figure stood at 41 percent. The figure is also subject to a clear north-south gradient, apart from a few exceptions: While the economic benefit is highest in Hamburg at 40 percent, it is only 23 percent in Stuttgart. The added value in Berlin is 36 percent. In fact, owner-occupiers are at an advantage in all of Germany's “Big Seven” cities. The calculation is based on the net rent versus the owner-occupier housing costs which break down into the purchase price, the incidental acquisition costs, the mortgage interest and the loss of interest on equity capital, reinstatement and depreciation.

Homeownership Increasingly Affordable – while Ownership Rate Stagnates

Over the past years, the low level of interest rates has made homeownership more and more affordable. Despite this fact, however, Germany's homeownership rate is flatlining, especially in the metropolises. Moreover, the number of households that switch from renting to buying a home is declining, and has dropped by 25 percent since 2013. The age of home buyers has gone down slightly from 50 to 48 years on average.

This is still rather late in life to move from a rented flat into a home of ones own when compared to other countries. The largest group of people opting for the switch are childless couples living together. Both members of such households tend to hold down jobs and to have higher incomes. Many of those transitioning (more than 30%) are singles with a high net income.

“Due to the low interest rates, buying remains more affordable than renting, even in the major cities. The cost advantage equals 36 percent in Berlin, 37 percent in Frankfurt am Main, and 24 percent even in Munich. Yet the number of buyers is going down, while buyers in cities are getting older and have fewer children. The age average of urban first-time buyers is 48 years, and the number of children in buyer households has dropped from 0.55 to 0.35 children per household over the past two years alone. The main cause that keeps many households from buying a home are the daunting capital requirements, breaking down into incidental acquisition costs and equity capital. This is unfortunate insofar as it is particularly important for younger generations to supplement their pension plan with a home owned outright,” said Prof. Dr. Michael Voigtländer, Head of the Financial Markets and Real Estate Markets Area of Competence at the IW Economic Institute in Cologne, as he summarised his survey.

Follow-up Financing Poses Low Threat

Unlike tenants, home owners build up their assets as they repay their loans. Even if interest rates for follow-up financing were to rise to 4.5 percent in Germany, homeowners would be under less financial strain than tenants, despite their payments for interest, principal and reinstatement costs. This is true for 93 percent of all counties, and implies that this sort of retirement scheme is almost complimentary. Only in seven percent of the counties in Germany does asset-building come at a higher burden than renting – and most of the counties in this category are located in the Munich metro area.

About the Cologne Institute for Economic Research (IW)

The Cologne Institute for Economic Research (IW) is a private economic research institute committed to a liberal economic and social order. The institute is organised as a registered pro-bono association. Its members include around 110 industrial associations and employers' association along with individual companies. Among its project partners are primarily foundations, associations, and public-sector institutions.

About ACCENTRO Real Estate AG

ACCENTRO Real Estate AG is a residential property investor and Germany’s market leader in housing privatisations. Its real estate portfolio consisted of around 5,200 units as of 31 December 2020. In addition to Berlin, regional focal points include East German cities and conurbations, as well as the Rhine-Ruhr metro region and Bavaria. The business activity of ACCENTRO comprises four core divisions. These are the tenant-sensitive retailing of condominiums to owner-occupiers and private buy-to-let investors, the sale of real estate portfolios to institutional investors, the set-up and management of a proprietary real estate portfolio, and third-party condominium marketing for property asset holders, investors and developers. The shares of ACCENTRO Real Estate AG are listed on the Prime Standard segment of the Frankfurt Stock Exchange (German securities code number WKN: A0KFKB, ISIN: DE000A0KFKB3).

Press And Public Relations Contact

Karl-Philipp Jann


Rankestrasse 17

10789 Berlin



+49 (0)30 - 72 62 76 1612

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