'Why People in Germany Rent More Often Than They Buy: Reasons,
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Germany remains one of the few EU countries where renting is more common than homeownership. There is no single reason for this: home purchases are held back by high real estate prices, associated costs, banks’ equity requirements, a cautious attitude toward long-term mortgages, and strong legal protections for tenants.
Germany—A Country of Renters
According to Eurostat data for 2024, on average across the EU, about 68% of residents owned their homes, while about 32% rented. Germany stands out in this context: renters accounted for approximately 53% of the population, meaning that homeowners made up about 47%.
Destatis calculates the figure slightly differently—based on households living in owner-occupied housing. According to the 2022 microcensus, just under 42% of households in Germany lived in an apartment or house they owned themselves.
These figures vary depending on the methodology used, but the conclusion is the same: in Germany, renting is a normal and widespread form of housing, not just a temporary option for students or newcomers.
| Indicator | Latest verified data |
|---|---|
| Percentage of renters in the German population | approximately 53% in 2024, according to Eurostat |
| Share of homeowners among the German population | approximately 47% in 2024, according to Eurostat |
| Percentage of households living in owner-occupied housing | just under 42% in 2022, according to Destatis |
| Average homeownership rate in the EU | approximately 68% of the population in 2024, according to Eurostat |
Why Buying a Home Is More Complicated Than It Seems
High Entry Costs
A buyer must pay not only for the property itself but also for Nebenkosten—the associated transaction costs. These include Grunderwerbsteuer, notary fees, registration in the Grundbuch, and, depending on the transaction, a portion of the real estate agent’s commission. Even when a bank finances most of the property’s cost, these expenses often have to be covered out of pocket.
In practice, the initial capital can consist of two parts:
- a down payment, often 10–20% or more;
- Purchase costs, which—depending on the federal state and the terms of the transaction—can significantly increase the total amount required.
Therefore, buying a home in Germany often requires tens of thousands of euros in savings—even before factoring in renovations, furniture, and moving expenses.
Income Must Support a Long-Term Mortgage
Banks evaluate not only salary levels but also job stability, household expenses, loan term, equity (Eigenkapital), and the amount of money remaining after the monthly payment. For foreigners, residence status, probationary period, contract type, and length of stay in Germany are also important factors.
Mortgages in Germany may be available to non-residents or newcomers, but the terms depend on the borrower’s profile. The less equity a borrower has and the higher the risk to the bank, the more expensive or difficult it is to secure financing.
Interest Rates Are No Longer at Record Lows
The old argument about “the cheapest mortgage” is outdated. Following a period of low interest rates, the market experienced a sharp rise in rates, followed by a price correction. By 2026, homeownership had once again become a topic of discussion, but housing affordability still depends on the region, income, interest rates, the fixed-rate period, and the amount of Eigenkapital.
Prices and Rents Are Not Rising at the Same Rate
The market has fluctuated in waves. In the 2010s, home prices in major cities rose faster than rental rates. Then, high interest rates and weak construction activity cooled the market, but a housing shortage sustained demand for rentals. According to Destatis, in the fourth quarter of 2025, residential real estate prices in Germany rose again by an average of 3.0% compared to the fourth quarter of 2024.
This does not mean that buying is always more profitable or always riskier. In Germany, the “buy vs. rent” decision depends on the city, the length of stay, taxes, the condition of the property, the risk of repairs, and how attached a person is to a particular location.
Why Renting Makes Sense
Flexibility
It’s easier for a renter to move for work, family, or school. There’s no need to sell a property, pay taxes and notary fees for a new transaction, look for a buyer, or worry about changes in market prices.
This is especially important for newcomers: the first few years in Germany often involve adjusting to life here, changing jobs, moving between cities, and searching for a neighborhood where it’s truly comfortable to live.
Fewer Household Responsibilities
In a rented apartment, responsibility for major issues lies with the landlord or property management company (Hausverwaltung). The tenant pays for ongoing expenses and fulfills minor obligations under the lease, but does not bear the full risk of major repairs to the roof, facade, heating system, or plumbing.
Homeowners have more control, but also more responsibilities: building maintenance fees, reserve funds, special assessments, repairs, insurance, taxes, and property management.
Strong Tenant Protection
In Germany, a lease agreement typically provides strong protection for tenants. As long as rent is paid and the lease is not breached, it is difficult to evict a tenant. Termination based on “Eigenbedarf” (personal use) or other grounds is possible, but it is regulated by law and often requires time, documentation, and compliance with procedures.
Therefore, renting a home is not viewed as an inherently unstable option. For many, it is a normal long-term strategy.
Why Homeownership Is Still Attractive
Buying a home can be a sensible choice if a person plans to live in one place for a long time, has sufficient equity, understands the maintenance costs, and wants to lock in a housing strategy for decades.
| Buying is a good option if | Renting is often more practical if |
|---|---|
| plan to live in one city or neighborhood for a long time | may move for work or family reasons |
| savings are enough to cover utility costs and the down payment | personal funds are only enough to cover part of the transaction costs |
| long-term loans do not cause significant stress | a 20- to 30-year mortgage is psychologically unacceptable |
| there is a reserve for repairs and Sonderumlage | flexibility and predictability of monthly expenses are more important |
| high-quality property, familiar neighborhood, reasonable price | the market in the desired city is overheated, or the property requires costly repairs |
Over the long term, a homeowner gradually builds equity in the property. A renter retains flexibility and can invest their disposable income elsewhere. The financial outcome depends on discipline, the market, and the specific transaction—not just on the notion that “renting is throwing money away.”
Risks of Buying a Home in Germany
The main risk is buying a property that exceeds a family’s financial means. Even with a stable income, unexpected repair costs, Sonderumlage, rising utility bills, unemployment, or the need to move may arise.
There is also a legal risk associated with the loan agreement. Section 490 of the German Civil Code (BGB) allows a lender, under certain conditions, to terminate a loan early if the borrower’s financial situation or the value of the collateral deteriorates significantly and there is a risk that the debt will not be fully repaid. In practice, this does not mean an automatic “margin call” whenever prices fall, but it serves as a reminder: a mortgage is a long-term commitment, not just a way to replace rent with a payment to the bank.
Government Support: Baukindergeld Is No Longer the Main Tool
Referring to Baukindergeld as a current support measure is outdated. This program was temporary and is no longer a universal new tool for families buying a home.
Instead, in 2026, it is more important to look at the current KfW and BMWSB programs, particularly “Wohneigentum für Familien” (Homeownership for Families). Support is not provided in the form of a simple annual child allowance, but through subsidized loans for families who meet the program’s conditions—such as income requirements, having children, living independently in the property, and meeting energy efficiency standards.
Before buying, it’s worth checking the current KfW programs, as terms, loan limits, and interest rates are subject to change.
Baukindergeld is useful as a historical example, but not as a primary guide for a new purchase in 2026.
What Should a Newcomer Choose?
For most newcomers, it makes more sense to rent at first. This gives you time to get to know the city, the job market, public transportation, schools, the neighborhood, and the actual costs of living. You should consider buying only after your income is stable, your residency status is clear, and your plans to live in Germany extend beyond just a few years.
Before purchasing, check:
- How many years are you willing to live in one place?
- How much of your own money will remain after paying Nebenkosten?
- Will the budget withstand rising expenses and a temporary loss of income?
- Is there a budget set aside for repairs and maintenance?
- How easily could the property be sold if necessary?
- What KfW subsidies are currently available?
- What happens if the family moves or the household composition changes?
Brief Conclusion
Germans often rent not because buying is impossible in principle. Renting in Germany is legally protected, socially accepted, and offers flexibility. Buying requires a significant amount of Eigenkapital, a stable income, and a willingness to manage risks. Therefore, the right question isn’t “which is more profitable overall,” but “which option is right for a specific city, family, life stage, and budget.”
