Press Release

ACCENTRO-IW Housing Cost Report 2019


April 2019

Berlin, 29. April 2019 – Here is the upshot of the ACCENTRO-IW Housing Cost Report 2019: Buying residential property in Germany remains much more affordable than renting, and this is true nationwide. However, two trends have emerged that run counter to this observation: The number of first-time buyers continues to decline, while their medium age is rising. When looking at Germany as a whole, the survey findings suggest that buying a home is roughly 40 percent more affordable on average than renting. This is down from a 45-percent cost advantage in 2017. For the nationwide coverage of the 2019 Housing Cost Report, the rents and owner-occupiers’ housing costs were analysed in all 401 of Germany’s districts and independent cities. The report was compiled on behalf of ACCENTRO Real Estate AG by the IW German Economic Institute in Cologne under the scientific direction of Prof. Dr. Voigtländer.

“Considering the rise in property prices and the persistently low level of interest rates, it is still safe to say that homeownership represents the best private retirement scheme available. On top of that, the ACCENTRO IW Housing Cost Report demonstrates that it is more affordable to buy than to rent almost anywhere in Germany. At the same time, the survey shows that the household members of first-time buyers keep getting older and wealthier. Especially young families with children fail to take advantage of the now-as-then affordable conditions for buying a home. The reason for this is that the equity stake that home buyers are expected to commit is rising in sync with property prices. This is where government action is urgently required, both by helping with the capital charge and by reducing the incidental acquisition costs. Granting an allowance or waiving the real estate transfer tax would be a good way to start,” elaborated Jacopo Mingazzini, CEO of ACCENTRO Real Estate AG.  

Metropolitan Owner-occupiers Tend to Benefit

In all of Germany’s “Big Seven” metropolises, the owner-occupancy costs undercut the rental costs associated with a new lease. Specifically, the advantage of owner-occupancy costs is lower than the population-weighted national average in Berlin (27 percent), Hamburg (35 percent) and Munich (38 percent) while being higher in Düsseldorf (54 percent), Frankfurt am Main (50 percent), Cologne (54 percent) and Stuttgart (44 percent). Meanwhile, the brisk rise in prices relative to the rental growth is driving a process of gradual convergence between owner-occupancy costs and rental costs in all of the Big Seven cities. The effect is most obvious when comparing owner-occupancy costs with passing rents. A comparison reveals that owner-occupancy costs exceed the passing rent level in three of the seven metropolises. The cost disadvantage in Berlin equals 21 percent, ten percent in Hamburg and three percent in Munich. “The striking outcome for Berlin is due not least to the city’s vast rental housing market, with rental accommodation claiming a share of around 82 percent. As a result, passing rents are significantly slower to rise in Berlin,” elaborated Prof. Dr. Michael Voigtländer, Head of the Area of Competence Financial Markets and Real Estate Markets at the IW German Economic Institute in Cologne. The calculation is based on the net 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 on equity capital along with reinstatement costs and depreciation.  

Homeownership Attractive in Virtually All Districts

Comparing owner-occupancy costs and rents across Germany’s districts and independent cities returns a similar picture. In 94 percent of the districts, owner-occupancy costs are lower than the rental costs on a new lease. The majority of those districts that show the lowest economic benefit of homeownership are located in the Ruhr and Sauerland regions of North Rhine-Westphalia and in certain parts of East Germany. Most of the 26 districts where owner-occupancy costs are higher than rental costs are also located in these areas. “The situation is explained by the slow and in some cases negative price dynamic for freehold residential property and the poor growth outlook for these districts,” said Voigtländer.

A look at the national level shows that the economic benefit of homeownership is very unevenly spread across Germany. Districts in Brandenburg that are part of the Berlin metro region show particularly high cost advantages of homeownership over renting. Owner-occupiers in the districts Oder-Spree and Oberhavel pay about 60 percent less for housing than tenants do. In the city of Hagen in the southern Ruhr, by contrast, owner-occupying your home is 38 percent more expensive than renting it.

The Housing Cost Report also studied the interest rate sensitivity in each district. The analysis returned a robust picture: In 346 districts, homeownership would still have economic benefits over renting even if the interest level were to rise to three percent p.a. (current level: 1.96 percent).

Homeownership Remains Affordable

According to the report, the parameters for acquiring a home remain excellent. To be sure, the nationwide price average is heading for a peak level. But the interest rates for long-term mortgage loans are on a historically very low level. In terms of the population-weighted average, barely 11,000 euros would have to be spent annually on interest and amortisation to fully pay off a 100-square-metre flat within 25 years. In some of the metropolises and immigration cities, the purchase of residential property is significantly more expensive due to the strong price dynamics that demand and rising construction costs are causing. In Berlin, Frankfurt and Stuttgart, you pay 1.8 times as much, in Hamburg 210 percent and in Munich an actual 280 percent. The most affordable metropolises with a price level of just 130 percent of the national average are Cologne and Düsseldorf.  

Buyer Analysis: First-time Buyers More Urban, Older and Wealthier

Notwithstanding the favourable financing conditions, the number of first-time buyers is declining. This development is mainly driven by the rural regions. It is attributable, inter alia, to the negative migration balance of smaller municipalities that are losing residents to larger independent cities. In the big cities, meanwhile, the absolute number of first-time buyers has remained stable. But the places in Germany that favour homeownership most are still the small towns. In 2017, the share of homeownership share was only 28 percent in metropolises with populations of more than 500,000 compared to 35 percent in cities of 100,000 to 500,000 residents. Midsize towns showed a share of around 50 percent while in the smallest communities and villages, two out of three residents owned their homes outright.

At the same time, first-time buyers are getting older. In 2017, their mean age was just under 48 years in cities with over 100,000 residents (2010: 46 years) and just under 44 years in Germany as a whole (2010: 42.5 years). Average first-time buyers also have higher incomes than they used to. The median net household income in 2017 was c. 3,100 euros (2010: 2,900 euros).

“The fact that, despite all the sound reasons, the number of households opting for homeownership is so low should probably be blamed on societal changes. More volatile careers, fewer persons per households and the desire for an urban lifestyle diminish the appeal of homeownership. Add to this the short housing supply in general and in freehold residential property in particular, especially in the big cities. Nevertheless, one would generally expect a higher number of people to acquire residential property, but hurdles in the form of high capital requirements seem to keep many average earners without assets or high-net-worth parents from becoming homeowners. Accordingly, these households not only bear higher financial burdens than comparable tenants and have no way to build up a pension pot, but they also have a growing sense of social unfairness since only a minority of the population is able to take advantage of the ongoing real estate price boom. It is high time the body politic took a hard look at the situation to identify and dismantle any barriers blocking access to homeownership,” said Voigtländer.

You can download the study in PDF format here: Housing Cost Report 2019

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).

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.

Press And Public Relations Contact

Karl-Philipp Jann


Rankestrasse 17

10789 Berlin



+49 (0)30 - 72 62 76 1612

Further readings

Press Release

Amendments to the terms and conditions of the 2020/2026 bond successfully completed with clear investors’ approval

24. January 2024

Continue reading
Press Release

Difficult parameters continue to weigh on business development

30. November 2023

Continue reading