The desire to own a home remains strong, even amongst young people: 80 per cent of 23- to 30-year-olds who are currently renting are interested in buying a property. At the same time, they are showing flexibility when it comes to choosing where they will live in the future. The findings come from the latest Interhyp Dream Home Study, covered by Handelsblatt, WirtschaftsWoche and Cash., among others. This is a positive sign for the residential property market, as many young people are sticking to their plans to buy a home even under the current difficult financing conditions.
However, the desire to own a home is by no means limited to young people. Across all age groups, 68 per cent of tenants would like to live in their own home one day. Those who have already taken this step almost never regret it: 97 per cent of homeowners are satisfied with their decision. Among around half of 23- to 30-year-olds, the desire to own a home has actually increased in recent years. Interest therefore remains strong, even if realising this ambition requires time and financial preparation.
Young prospective buyers are also willing to compromise. For instance, 65 per cent of 23- to 30-year-olds interested in buying a property can envisage living outside the major cities or even in more rural areas. Compromises are also possible when it comes to the property itself: 41 per cent would accept less living space, whilst 40 per cent would opt for a different type of property. Last year’s study had already highlighted a certain pragmatism in people’s housing preferences. Whilst the detached house remained the most popular dream property, other types of housing were also gaining in popularity. At the same time, respondents wanted living space that could be adapted to different stages of life.
Local authorities and property developers therefore face the challenge of providing homes that combine a high quality of life with well-designed layouts and affordability. The latest survey underlines just how important this combination is, particularly for young prospective buyers. Housing options must meet both the needs and the budget of potential buyers.
Even if they are unable to buy a home straight away, many young people remain committed to their goal. Of the young tenants who wish to buy, 41 per cent would save for longer or save more, whilst 33 per cent would postpone the purchase. Only five per cent would consciously plan to remain tenants for the rest of their lives.
Financing remains a major hurdle. 67 per cent consider buying a home to be feasible if their family can offer financial support. Without such support, the figure is 32 per cent. To enable more young people to buy their own homes, the authors of the study therefore propose, amongst other things, real estate transfer tax allowances for first-time buyers, as well as supplementary financing instruments.
“The findings show that young people are continuing to pursue their dream of home ownership and are open to different types of housing and locations. For us as property developers, this sets a clear task: we must create homes that suit this generation’s needs and financial circumstances. Federal and state governments must also introduce effective measures to help more people become homeowners. These could include measures to reduce construction costs, exemptions from real estate transfer tax for first-time buyers, financial support such as subsidised KfW loans or KfW guarantees,” says Jacopo Mingazzini, CEO of The Grounds.
