Germans spend a fourth of their income on housing costs
In the world of wallet-emptying expenses, housing costs stand tall. And when you're low on dough, it's a heavier stone than a feather. And guess where it weighs like an anvil? That's right, Germany.
According to stats from Eurostat, crunched by the Federal Statistical Office (BSW) on request from the BSW, an average of every fourth Euro spent by Germans goes towards housing. That's a whopping 24.5% of their income, a massive 5.3 percentage points more than the EU average. Despite a slight improvement since 2023, Germany remains the housing cost king in Europe.
Economy - Cities on Fire: Sky-high Rents Exacerbating the Skills ShortageData reveal that folks in Germany coughed up an average of 43.8% of their income on housing in 2024, nearly every second Euro! Ouch! While Denmark (26.3%) and Greece (35.5%) report higher average housing costs, Sweden's and Germany's shares are about neck-and-neck. Meanwhile, countries like Cyprus (11.4%), Malta (12.5%), Italy, and Slovenia (each 13.6%) have it a whole lot easier on the housing front. The EU average sits pretty at 19.2%.
Politics - WSB Chairwoman Sahra Wagenknecht: Make it Rain with a Rent Cap and More Non-Profit HousingAccording to Wagenknecht, living in countries like France or Austria can cost considerably less than Germany. Her prescription? A nationwide rent cap and a beefed-up share of non-profit housing in the housing market.
Caveat emptor. This expensive living isn't unique to Germany, but when you consider how things are done differently elsewhere, it sure feels like a hard pill to swallow.
Sources: ntv.de, hul/AFP
- Apartment
- Germany
- Europe
- Statistics
- Federal Statistical Office
- BSW
- Sahra Wagenknecht
- Housing Market
- Amber Waves of Rent and Property Values
- Economic Factors
- Affordability Issues
Behind the Scenes: The Reasons for Germany's High Housing Costs
- A Pricey Obsession: Germany's surging demand for housing, fueled by urban growth, clashes with the limited supply. This supply and demand imbalance creates a vicious cycle of rising prices and rents.
- A Strong Economyand an Upwardly Mobile Housing MarketGermany's booming economy plays both the villain and the hero. While its growth drives up demand for housing, it also boosts the overall economy[4].
- The Post-Rent Cap Leap: The removal of rent caps in Berlin in 2021 unleashed a rental frenzy, pushing rents sky-high and worsening affordability issues[3].
- Comparative Growth and the Euro-Zone Divide: While some European countries like Luxembourg, Finland, and Austria saw drops in property values, Germany's housing market continued to chug along, though more moderate than rapid growers like Bulgaria and Portugal[2][4].
- Affordable Housing: A vanishing dream: The affordable housing market takes a hit, with many families spending a significant portion of their income on rent, particularly the low-income lot who face fewer affordable options[3].
- The Community policy in Germany might need to address the affordability issues in its housing market, as a significant portion of the average income is spent on housing, reaching 43.8% in 2024, according to Eurostat data crunched by the Federal Statistical Office (BSW).
- Vocational training programs could play a role in providing individuals with additional skills to secure better-paying jobs, helping them manage their Personal-finance and housing expenses more effectively, especially in light of Germany's high housing costs.
- For those struggling with housing affordability, like the low-income families spending a substantial part of their income on rent, policymakers may consider the implementation of rent caps and increased non-profit housing within the Housing Market to ensure better affordability.
- In an effort to further understand the reasons behind Germany's high housing costs, a comprehensive study could be conducted by the Federal Statistical Office (BSW) on the complex interplay between Economic Factors, Comparative Growth, and the Euro-Zone Divide, pinpointing contributors to the country's expensive housing market by 2024.