The savings of private households in Germany have risen sharply in the last six years. Most recently, the savings ratio has once again shot up as a result of the Corona crisis. However, extremely low interest rates in combination with the traditional risk aversion of German private investors and rampant regulation of investment advice make it difficult to make a balanced investment. In addition, high real estate prices and restrictive building regulations are making it increasingly difficult to acquire real estate as an alternative to investing money. As a result, a growing investment backlog has built up and the proportion of uninvested funds in the form of demand deposits and cash is continuing to grow.
The fact that, despite the corona crisis, private households did not engage in panic selling of securities in the first two quarters of the current year, and instead invested more funds in the form of shares, gives cause for optimism. However, this only affects a small proportion of private households, and in order to really counter the growing investment backlog, the effect was too weak.
A policy that promotes the sustainable accumulation of wealth by broad sections of the population must offer more friendly conditions. Of course, investor protection and building regulations have their justification. However, if excessive regulation leads to the fact that normal and above all small investors are practically unable to access important investment categories and young normal-earning families can no longer afford to own their own homes, it is essential to clear out superfluous bureaucracy and find a new regulatory balance. In addition, investment incentives should take the form of improved depreciation options for residential property, for example.