Why Renting a Flat in Germany is Totally Common

The attitude to rent reaches back to the World War II

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Not just poor people are renting a flat in Germany. Jacquie Boys-Ikon Images@gettyimages.de

Why Germans rent flats instead of buying them

Although Germany has got the most successful economy in Europe and is basically a wealthy country, it has also got one of the lowest home ownership rates on the continent and is also way behind the US. But why do Germans rent flats instead of buying them or even built or buy a house? Buying an own accommodation is the goal of many people and especially families all around the world.

For Germans, it might seem that there are things way more important than being a home owner. Not even 50 percent of the Germans are home owners, whereas over 80 percent of the Spanish are, only the Swiss are even renting more than their northern neighbors. Let's try to track the reasons for this German attitude.

 

Looking back

As many things in Germany, also the tracking of the attitude to rent reaches back to the Second World War. As the war ended and Germany singed the unconditional surrender, the whole country was a rubble. Almost every bigger city was destroyed by the British and American Air Raids and even the smaller village had suffered from the war. Cities like Hamburg, Berlin or Cologne where nothing but a big pile of ashes. Many civilians got homeless because their houses where bombed or collapsed after the fights in their cities, over 20 percent of all housing in Germany where destroyed.

That was why it was one of the first priorities of the new built West-German government in 1949 to prove every German a safe place to stay and live. Therefore, big housing programs where started to rebuild the country. Because the economy was also laying on the ground, there was no other opportunity than having the government put in charge for new housings.

For the new born Bundesrepublik, it was also very important to give the people a new home to face the opportunities communism promised just on the other side of the country in the soviet zone. But there was of course another opportunity coming with a public housing program: Those Germans who haven't been killed or being captured during the war where mostly unemployed. Building new flats for over two million families could create jobs that where urgently needed. All this lead to success, the lack of housings could be reduced during the first years of new Germany.

 

Renting can just be a good deal in Germany

This lead to the fact that Germans today just as their parents and grandparents made reasonable experiences with renting a flat, not only from a public housing company. In the major cities of Germany like Berlin or Hamburg, most of the flats available are in public hand or at least managed by a public housing company. But besides the big cities, Germany has also given the private investors the opportunity to own properties and rent them out. There are many restrictions and laws for the landlords and tenants they have to follow which proves that their flats are in a good condition. In other countries, rental flats have the stigma of being run down and mainly for poor people who can't afford an own accommodation.

In Germany, there are none of those stigmas. Renting seems just as good as buying - both with advantages and disadvantages.

 

The laws and regulations made for renters

Talking about the laws and regulations, Germany has got some specials that make a difference. For instance, there is the so called Mietpreisbremse which just has been passed the parliament a few months ago. In areas with a strained housing market the landlord is only permitted to increase the rent up to ten percent above the local average. There are a lot of other laws and regulations which lead to the fact that the rents in Germany are - compared to those of other developed countries - are affordable. On the other side, German banks have high preconditions for getting a mortgage or a loan to buy or even built an own house. You just won't get one if you don't have the right sureties.

For long term, renting a flat in a city can therefore be a better opportunity.

But there are of course some negative sides of this development. Like in most other western countries, the so called gentrification can also be found in Germany's major cities. The good balance of public housing and private investment seemed to tip over more and more. Private investors buy old houses in the cities, renovate them and sell or rent them out for high prices only wealthy persons can afford. This leads to the fact that "normal" people can no longer afford living inside the big cities and especially young people and students are stressed to find a proper and affordable housing. But that's another story because they couldn't afford buying a house neither.