A new report by LBS and empirica has found that home ownership in Germany is increasingly constrained by the availability of savings rather than income.
The Affordability Barometer 2026 report explored the current situation for first-time homeowners in Germany, and found that just 5.7% of households of typical working age (30 to 44 years) had sufficient savings at the end of 2025 to meet typical equity requirements for a property purchase.
This compares with roughly 10% around fifteen years earlier.
The study defines equity as around 20% of the purchase price plus region-specific ancillary costs (real estate transfer tax, notary and land registry fees, and real estate agent commission).
Barriers to home ownership
As it notes the main barrier to homeownership is the lack of accumulated savings. While income levels in many cases remain sufficient to support mortgage payments, fewer households meet the upfront equity requirement. It notes that this constraint has become more significant over time, particularly as property prices have increased.
Income conditions changed more sharply after 2022, when rising interest rates increased financing costs. Before this shift, a majority of tenant households had sufficient income to meet typical debt service thresholds. After the increase in interest rates, the share meeting these thresholds fell below 40%.
Regional situation
On a region-by-region basis, in Berlin, Brandenburg, and Mecklenburg-Western Pomerania, only a small proportion of younger tenant households meet the equity requirement, with figures between just over 2% and under 4%.
‘This reflects a capital city effect,’ the report notes. ‘Years of high immigration to Berlin and its surrounding area have driven up property prices to such an extent that fewer and fewer local tenants have been able to raise sufficient equity capital for home purchases’.
Higher shares are observed in Bremen, Saarland, Lower Saxony, and Rhineland-Palatinate, where around 7% to 9% meet the threshold.
Overall, the study finds that income constraints are more pronounced in large cities, while equity constraints are more widespread across all regions. In city states such as Berlin and Hamburg, a smaller share of households meet income thresholds compared to some eastern and smaller western states, where higher proportions of households could theoretically afford financing based on income alone. Read more here.
