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Post: From the dream of owning your own home


High interest rates and high construction costs: For many people, their own four walls are no longer affordable. The government wanted to encourage hosting. But so far nothing has happened.

The meadow where Sophia and Adrian Leistner wanted to fulfill their dream of owning their own home was left fallow. No digger, just grass. The young couple bought a property in Ebersdorf, near Coburg, two years ago and took out a construction loan. Interest rates were very low back then. But the development of the settlement was delayed.

“This is why our finances collapsed,” says Sophia Leistner. “We will need to secure new funding.”

But interest rates are now so high that it has become too expensive for us.

Sophia Leistner, proprietor

Monthly loan interest almost doubled

The duo initially took out a 350,000-euro loan at 1.1 percent interest. That was in 2021. “At that time we would have had a load of 1,100 euros per month. This was perfectly calculated even when it comes to potential children. And now we would have almost 2,000 euros. This is no longer possible for us.” Although both earn money, they cannot afford their own house.

This is the situation for many families in Germany right now. For a long time, generating interest on a ten-year commitment was around one percent. Since the spring of 2022, things have been increasing rapidly. In January 2023, interest rates rose to 3.5 percent and recently even exceeded 4 percent.

Real estate as a retirement provision is reserved for many

The result: Fewer and fewer people are still making the transition from lease-to-own. Real estate economist Prof. A fatal development for old-age insurance, says Michael Voigtländer:

Everyone who owns their own home saves on rent when they retire. Owning your own home is a hedge against rising rents, especially in big cities.

Michael Voigtländer, German Economic Institute

This is another reason the federal government has pledged to promote hosting in a coalition agreement. But even members of the government faction admit that after 15 months of traffic lights, almost nothing.

Home ownership promise not yet implemented

“It’s a very small-scale voting process at traffic lights,” Daniel Föst, policy-making spokesperson for the FDP parliamentary group in the Bundestag, told the ZDF front in an interview. “It shouldn’t excuse anything, but so far we’ve focused on these questions: Do people come in winter? Do we have enough energy?”

But now that these crises are somewhat under control, we need to focus on what’s left.

Daniel Föst, FDP parliamentary group building policy spokesperson

The incentive to own a home has come to a standstill. Baukindergeld has expired. A new program starts in June: lower interest rate construction loans. However, families with only one child earning a maximum gross of 60,000 euros per year are supported – the limit increases by 10,000 euros for each additional child.

In planning: subsidy program linked to high building standards

prof. “The program is very problematic, as the income limits are relatively low,” says Voigtländer. “And the subsidy is only given if you buy the highest new building standard. And of course this is extremely expensive. No one within the subsidy limits can actually afford such new buildings.”

Federal Building Minister Klara Geywitz (SPD) openly defended the program in an interview with ZDF:

We referred ourselves to Baukindergeld. The median family income was 45,000 euros – below what we currently estimate.

Klara Geywitz, Federal Minister of Construction (SPD)

Criticism of the amount of planned hosting

The volume of the new program is 350 million euros. That’s not enough, he criticizes the opposition. “In my view, the federal government’s subsidy for home ownership is a real failure,” says Jan-Marco Luczak, member of the Bundestag and spokesperson for the building policy of the CDU/CSU parliamentary group.

350 million euros is very little given rising construction costs and interest rates.

Jan-Marco Luczak, CDU/CSU parliamentary group construction policy spokesperson

Source: ZDF

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