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Germany’s Social Democrats plan to help people buy their own homes

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Germany’s Social Democrats plan to help people buy their own homes
A "Building and Financing" guide in front of a model of a residential building. Photo: picture alliance / dpa | Jan Woitas

The party of German Chancellor Olaf Scholz wants to help buyers who don't have enough for the initial deposit to enter the property market.

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Despite being the largest economy in the EU, Germany has the lowest level of property ownership. The latest government statistics show that only 42.1 percent of German households currently live in their own four walls, while around 57.9 percent are renting.

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READ ALSO: EXPLAINED: The reasons why so many Germans rent rather than buy

But that could soon be about to change, as the SPD, the largest party in the traffic light coalition, wants to launch a new initiative to promote home ownership in Germany.

According to the SPD’s Secretary General, Kevin Kühnert: "The ultimate aim is to replace equity." A state programme would ensure that households that have no savings but a stable income can get on the property ladder, he said. 

A survey conducted by mortgage broker Interhyp earlier this year showed that most tenants who are currently renting in Germany believe they will never be able to afford to buy a flat or house in their local area.

READ ALSO: How soaring German property prices are out of reach for buyers

Many people bring home decent wages, the SPD politician explained: "But if you can't put anything into the financing from your own pocket, then the purchase doesn't even happen. That's why we're currently working with the Ministry of Construction to develop a subsidy that will do just that."

In the interview with the Augsburger Allgemeine newspaper, the SPD politician also said that he was confident that the government could reach its goal of creating 400,000 new rental properties a year. The goal is tough, he said, but "possible if everyone does their part".

However, due to the slow issuance of building permits, ever-stricter regulatory requirements and the drastic increase in the cost of building materials and labour shortages, many experts and associations in the construction industry already see the project as a failure.

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ketcheson.bruce 2022/07/26 14:17
How about reducing the land transfer and agent fees which are among the highest in the world. The government shouldn't be getting rich because someone wants to buy a house.

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