German residents are shunning home purchases.

In a significant shift, only 33% of respondents named owning a home as their savings goal in 2025, a decrease of 10 percentage points from the previous year, according to the annual survey conducted by the Association of Private Building Societies, known as the "summer survey."

This departure from the real estate dream is particularly detrimental for old-age provision, as homeowners generally handle money more responsibly, reduce debts faster, and are independent of rental payments in old age. However, the prices of investment goods like stocks, Bitcoin, precious metals, and real estate have exploded, leaving many savers and life insurers in a difficult position.

The high cost of acquiring property is a major factor. Rising real estate prices, averaging around 3,400 €/m² for condominiums and 2,993 €/m² for houses, combined with higher interest rates and stricter bank lending conditions, have made it practically impossible for many Germans to buy property. Political uncertainties and lack of incentives further contribute to decreasing savings for homeownership, making the dream of owning a home increasingly unrealistic for many.

Another challenge comes from the reformed real estate tax, which is not revenue-neutral in practice, particularly affecting owners of detached houses negatively. Moreover, ancillary costs for real estate, including real estate agent fees, notary fees, and real estate transfer tax, can amount to significant sums, especially for expensive properties.

The Heating Act, an amendment to the Building Energy Act, requires owners to install heating systems that operate at least 65% with renewable energies. This requirement has caused uncertainty among real estate owners and installers, adding to the challenges faced by those saving for homeownership.

The sustainability of the statutory pension has been known for decades, but it is only now being widely discussed. As a result, people are increasingly putting their money aside for retirement (60%) and consumption (44%) instead of saving for real estate.

Germany ranks second to last in Europe in homeownership with 47.6%, while Spain and Italy have homeownership rates of three out of four citizens. The real estate transfer tax revenues have increased significantly, from 5.3 billion euros in 2010 to 18.3 billion euros in 2021.

Despite the challenges, the high level of homeownership would significantly relieve the economy. However, Germany is unlikely to catch up with countries like Spain and Italy in the foreseeable future. The dream of homeownership for many Germans is becoming increasingly difficult due to political interventions and regulations, making Germany a renter's country.

It is becoming practically impossible for many Germans to buy property today. Low interest rates could not compensate for the price increases across the board, and many with follow-up financing could soon face changed terms. More and more Germans consider owning a home to be unrealistic due to high costs, uncertain conditions, and lack of promotional impulses. The Heating Act, brought to the Ministry of Economics and Climate by Patrick Graichen, a former employee of the NGO "Agora Energiewende," adds to the uncertainty surrounding real estate ownership. The consequences of fewer Germans saving for property have not yet been fully determined, but it may mean that many are reluctantly saying goodbye to their life dreams.