The result: The connection between parents’ home ownership and their own property is decreasing in Germany – but not because opportunities are increasing for everyone, but because they are decreasing for almost everyone. This applies to both West and East Germany.
And something else is particularly striking: in a European comparison, Germany is far ahead when it comes to the connection between parents’ and their own home ownership. According to DIW, the probability of owning your own property is on average 21 percent higher if your parents already owned property. Only in four countries – Finland, Belgium, Italy and Ireland – is this value slightly higher.
Reason: In other countries, family background plays a smaller role. Access to home ownership is often more widespread there, for example through lower equity requirements, special support programs for first-time buyers or lower additional purchase costs. In some countries it is also more socially acceptable to rent long-term accommodation. This relieves young people of the pressure of having to acquire property and reduces their dependence on their parents.
Conclusion: Young people today are significantly less likely to own their own property than their parents. Even with parental ownership behind them, many people are unable to buy their own four walls. And anyone who comes from a renter household has a difficult time anyway. The residential status of the parents still has an impact, but ownership provides less and less protection against tenancy in the next generation. This raises questions about generational justice and social advancement.
According to the study authors, one reason for this is the high entry hurdles: While Germany was long considered a country for renters with low prices, rents have become significantly more expensive – in some cases more than the purchase prices. In addition, there is a high equity requirement due to strict lending. Without family help, many people have to save for years if they are ever able to buy property.
The study authors point out that it is not enough to support home ownership with individual government funding programs. People who could afford a property without subsidies usually benefit from this. People with low incomes or no assets continue to be excluded and thus miss the opportunity to build wealth and security.
What is missing, according to DIW, is a well-thought-out concept for affordable housing. It takes more than just incentives to buy: sufficient living space in cities and rural regions, fair rental prices and financing options that are also realistic for average earners. Because housing is more than a market. It is the basis for a secure life. And it shouldn’t depend on the parents’ account balance.
