Robert Kneschke-shutterstock
More and more people are afraid of old-age poverty and they are perfectly right to do so. There can be no reliance on the state pension alone, since it will probably only cover the subsistence level in the future. The Germans are therefore increasingly looking for ways to increase their own pension in order to secure a more comfortable retirement. Not so easy in times when some banks are already charging interest on deposit accounts. Real estate as a pension provision is the most popular instrument. This result was found in a recent survey by TNS Emnid.
Why the Germans prefer real estate as an old-age provision and which form of financing is the most popular for the purchase of real estate, can be found in this article.

No trust in pension

The issue of retirement provision is more present in the media than ever before. The good old Bismarckian pension system is becoming increasingly fragile: the number of depositors is declining and pensioners keep growing older and older. If the birth rate does not change and the life expectancy continues to increase, there could be as few as 65 million people living in Germany by 2060.
On behalf of the Bausparkasse Schwäbisch Hall, the market research institute TNS Emnid found out that 7 out of 10 Germans trust real estate as an old-age provision more than the state pension. Approximately 43% of respondents said they already own a condominium. Of those who do not yet own their own property, one-fifth plans to purchase one. This type of investment is particularly popular with 60% of young people currently under 29. For families, the trend of purchasing a property as pension provision is equally as common. Almost 40% of three-person households already own a property and an additional 20% are planning to purchase one.

Growing old in your own four walls

80% of owners want to move into their own property when they grow older. Of those planning on buying a property in the future, over 90% say they would want to move into their property at old age. Moreover, 15% of property owners questioned said that at old age they intend to use their property as a multi-generational house. According to the survey only 11% of respondents would be willing to sell their own property in old age, in order to replace it with a smaller, senior citizen friendly alternative.

Building loan contracts as one of the most popular forms of financing

Hardly anyone buys a condominium exclusively with own capital. However, many consider buying a property with saved money as a safer, simpler and more cost-effective alternative old-age provision. As the survey shows, building loan contracts, whose savings can be used as equity capital, count as one of the most popular forms of financing for a real estate purchases. The majority of respondents indicated that they prefer this compared to a traditional mortgage loan from a bank. The building loan contracts are particularly popular with young people and families. Almost 60% of under-29s have already financed their home with a building loan contract or are planning to do so in the future.
For those who do not wish to buy a property immediately can invest in real estate projects with small amounts over iFunded.de. You can currently participate in the CALVIN BERLIN project for example.

What are your thoughts on old-age pension? We look forward to your comments!