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Housing in Germany: Why are fewer young people buying their own homes?

The number of young people buying homes in Germany is falling. So who is buying property – and where?

Housing in Germany: Why are fewer young people buying their own homes?
Homes in Stuttgart, Baden-Württemberg, where home ownership is most common in Germany. Photo: DPA

Home ownership in Germany has remained at around 45 percent since 2010, but there are changes in who is buying properties.

Fewer young people are buying homes and there's a significant drop in first-time buyers, while older people continue to purchase property, according to a new study by the Institut der deutschen Wirtschaft (IW) in Cologne on behalf of the Bausparkasse Schwäbisch Hall.

The IW found the home ownership rate for 25-34 year olds in Germany has fallen from 17 percent in 2010 to 12 percent in 2017. At the end of the 1990s, that figure was much higher at 23 percent.

READ ALSO: Where in Germany it pays to buy your own home

Meanwhile, the home ownership rate has also dropped by five percentage points between 2010 and 2017 in the 35-44 year olds age group.

During the same time frame, the proportion of 65-74 year olds who own their homes rose by two percentage points to 58 percent.

The study also found the number of self-employed people buying homes has gone up, while less civil servants are entering the property market.

Why are some people not buying homes in Germany?

Researchers said the downward trend in some categories could reflect changing demographics in Germany due to increased migration, especially around 2015 during the height of the refugee crisis.

Or it could be down to the fact young people are choosing to study longer and that means they are entering into the job market later in life “which could lead to a later purchase of residential property”, the researchers said.

It's also difficult for people, especially younger generations, to save enough money to get a foot onto the property ladder in the first place.

Banks now demand a higher deposit to secure a mortgage while purchase prices are rising steadily. In some cases, these prices are simply too high for potential homeowners to afford.

Homes in Brandenburg. Photo: DPA

That's shown in the significant drop in first-time buyers. Between 1998 and 2002, the number of first-time buyers was still at a level of around 700,000 households per year in Germany. But in 2016 and 2017, there were fewer than 400,000 households per year – about 1 per cent of all homes.

However, buying a home is an attractive option (if you can save the money beforehand) due to low interest rates. And it could pay.

The household income of those who moved from a rented home to their own property has increased. In 2010, the average net income was €3,000 euros and in 2017 it was just under €4,000. 

READ ALSO: It's not that hard: The beginner's guide to buying a property in Germany

Where do people buy homes in Germany?

In rural parts of Germany, the ownership rate is higher than in urban regions. In 2017, more than half (51.1 percent) of households in rural areas lived in their own home. In the cities, that number was 42.8 per cent.

The highest home ownership rate of all Germany's 16 states in the latest figures from 2017 is in Baden-Württemberg. Just over 54.4 percent of all households live in their own property in the wealthy southern state.

It’s closely followed by Lower Saxony which has a 54 percent rate.

In eastern Germany, the home ownership rate remained below the German average of about 45 percent.

Berlin has by far the lowest home ownership rate with about 18 percent.

In a Europe-wide comparison, Germany ranks second last when it comes to property ownership – Switzerland is the only country where fewer people buy property.

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What foreign parents in Germany need to know about Sprach-Kitas

Germany has a number of specialised nursery schools that focus primarily on helping children with their German language skills. Here's what foreigners need to know about them.

What foreign parents in Germany need to know about Sprach-Kitas

What even is a Sprach-Kita? 

A “Sprach-Kita”, or Language Kindergarten, is a special type of nursery school that’s been around in Germany since 2016 under the government’s Sprach-Kita Programme. The main aim is to help young children build up their German language skills to a level that will allow them to succeed at school. 

How is this different to a normal Kita or daycare centre?

Unlike most Kindergartens in Germany, Sprach-Kitas employ staff who are specifically trained in language teaching and acquisition. These specialists are paid for through Sprach-Kita Programme funding and help to shape the environment of the nursery school, making it easier for children to develop their German skills in an everyday setting.

The schools also have access to external support and advice on catering to children with language setbacks, and may work closely with parents to encourage further language development at home. 

Since the scheme was set up in 2016, around 7,000 nursery schools have successfully applied for “Sprach-Kita” status and received at least €25,000 funding through the programme. These were mostly Kitas that had already taken in a higher-than-average number of children from foreign backgrounds, such as those in popular migrant or expat areas.

Sprach-Kitas will generally be much more diverse and focus most heavily on children’s language skills, in addition to teaching young kids about cultural inclusivity.  

READ ALSO: ‘Multilingualism is an enrichment, not a deficit’: Raising bilingual kids in Germany

Who are Sprach-Kitas for?

Any young child in Germany is allowed to go to a Sprach-Kita, but the main target audience for these specialised nurseries are the children of foreign parents.

In households where German isn’t the main language spoken, children may struggle to keep up with their classmates at school due to their lower level of German fluency. That could be because the child has two international parents – such as a French mum and an English dad – or because the child has more contact with a parent who doesn’t speak German. 

According to recent statistics, around one in five nursery-age children in Germany doesn’t speak German with their parents at home. That equates to 675,000 children in total. In addition, around 40 percent of nursery school children come from a migrant background. 

Through the Sprach-Kita Programme, government is hoping to help these children integrate at an early age to set them up fully for life in Germany. 

READ ALSO: EXPLAINED: The rise in multilingual children in Germany

Do I have to pay for a Sprach-Kita? 

Parents usually have to pay a monthly fee for their child to attend a German nursery school – and the same applies to Sprach-Kitas. The fee structure is generally set by the local government, meaning it can vary widely across different regions of the country.

However, you won’t pay any more (or less) for a Sprach-Kita than you would for an ordinary nursery school. 

Where can I find a Sprach-Kita?

Around one in eight Kindergartens in Germany is currently a Sprach-Kita, meaning they aren’t particularly hard to find.

To look for one near you, the best thing to do is to hop onto the government website and look on this interactive map detailing all of the Sprach-Kitas in Germany. 

Children ride tricycles at a German kindergarten.

Children ride tricycles at a German kindergarten. Photo: picture alliance/dpa/mauritius images / Westend61 / M | Westend61 / Mareen Fischinger

However, partly due to staffing shortages, Kita places in Germany are highly competitive right now – so securing a place may involve getting in touch with a number of them at an early date. 

READ ALSO: How can Germany improve its Kitas amid teacher shortage?

Is there anything else I need to know?

Currently, the funding for the Sprach-Kita Programme is due to end at the end of 2022 – and it’s unclear what the fate of the existing language-focused nursery schools will be after this happens.

Though the three parties of the traffic-light coalition had pledged to extend the scheme in their coalition contract, it appears that the programme was one of the first victims of savage negotiations over next year’s budget.

That means the federal government are now hoping to transfer the responsibility for funding the language support over to the 16 states.  

“Responsibility in the area of daycare for children lies with the states and cannot be permanently financed by federal funding programmes,” a spokeswoman for the Family Ministry told Welt. 

The Ministry for Families has also pledged to make language acquisition a cornerstone of its forthcoming Good Childcare Act, which will see at least €2 billion in federal funding made available for nurseries in 2023 and 2024. 

That could make it possible for existing Sprach-Kitas to remain in place as specialised centres for language support.