Bundesbank study: German real estate owners are getting richer
The assets of the Germans is rising - but it is very unevenly distributed: According to a Bundesbank study, especially real estate owners are well there.
In the past ten years, the German economy grew and grew. Such a long period of uninterrupted economic growth last occurred in the 1980s. Gross domestic product is expected to grow again this year, albeit significantly less than in previous years.
But where does this historic upturn actually arrive?
Answers to this are now the current asset report of the Bundesbank. On more than 20 pages, the authors present numerous data on the wealth distribution of German households.
It is noticeable: rising house prices are the main reason why the assets of German property owners are growing strongly. According to this, the net wealth of the real estate owners in 2017 was 277,000 euros - 37,200 euros more than three years ago. Tenant households, however, only come to a median assets of 10,400 euros. To determine the median, households are divided into a richer and a poorer half. The wealth of the household in the middle is the median wealth, compared to the average income it is more robust against statistical outliers.
"The rise in real estate prices in recent years has a significant impact on the development of wealth," the authors write in their report. However, the upswing is only available to a rather small group: in Germany, only 44 percent of households live in their own four walls. In Italy and Spain, this figure was around 70 or 80 percent in 2014.
A similarly positive development as with real estate assets is to be found with stock owners: On average, the value of the shareholdings increased by about 13 percent. The German stock index Dax increased by 30 percent between mid-April 2014 and mid-April 2017, so the measured increase was lower.
But overall, private assets in Germany also rose slightly from 2014 to 2017, as the report shows. On average, gross assets per household amounted to 262,500 euros. If one subtracts the debts of the households, the average net wealth amounts to 232,800 euro, whereby a distinction is not made between real estate owners and tenants.
The mean value of net assets, the so-called median, is significantly lower. This was in 2017 net at 70,800 euros. This is because some very high assets distort the average value upwards.
Still high inequality
In line with this, the Bundesbank points out that inequality in Germany is still significantly higher than the average for the eurozone - in several possible measures. This has hardly changed in the three years between the surveys. "Germany is still a country in which private assets are unevenly distributed," write the authors. The new numbers even hinted at increasing inequality.
In 2017, the lower half of households owned only three percent of total net assets. The top ten percent of households, on the other hand, owned 55 percent of their assets. In 2014, that was 60 percent, and in 2010/2011 59 percent. The Bundesbank warned against reading a trend from this development. In 2017, less wealthy households participated in the survey compared to previous investigations.
Nevertheless, inequality remains comparatively high in Germany. Across the eurozone, the top 10 percent of households owned 51 percent of assets. In the traditionally unequal United States, 2013 was around 77 percent.