Opting for Coziness at a Steep Price: Germans Shell Out Nearly a Quarter of Their Income on Housing
Household expenses in Germany see Euros spent on housing approximately every fourth time
In the realm of everyday expenses, housing stands tall as one of the heftiest. And when income is meager, it weighs down especially hard. A statistic screams loud and clear: Germany ranks among the costliest European nations for housing.
On average, Germans forked over almost a quarter of their earnings (24.5%) on shelter last year, according to data from Eurostat, as examined by the Federal Statistical Office (Bundesamt für Statistik, or BFS) on behalf of the BSW. That's a whopping 5.3 percentage points more than the EU average. Although there's been a slight improvement over 2023, Germany continues to top the European housing cost charts, the BSW lamented.
In contrast, spending on housing is noticeably less in comparable countries like France, Austria, or the Netherlands. The BSW Chairwoman, Sahra Wagenknecht, voiced her concern over the extraordinary housing expenses in Germany, citing countries like France and Austria as examples of how it could be made more affordable.
She advocates for a nationwide rent cap and a rise in non-profit housing within the housing market to bring down costs.
Germans at the brink of poverty, interestingly, spent an average of 43.8% of their income on housing — equivalent to nearly every second euro. Denmark was more expensive (26.3%), while Greece stood as Europe's priciest, with an average housing cost of 35.5%. Sweden's numbers matched those of Germany, while Cyprus (11.4%), Malta (12.5%), Italy, and Slovenia (each 13.6%) boasted comparatively low costs, with the EU average clocking in at 19.2%.
The Nitty-Gritty:
- Housing Affordability Across Europe: While the specifics on why Germans shell out more of their income on housing compared to other Europeans are not directly provided, general trends in affordability across the continent can be inferred. Across the EU, housing costs have been on a steady rise, with property prices increasing by 4.9% and rents by 3.2% in the final quarter of 2024 compared to the same period in 2023[5]. This escalation could lead to a higher percentage of income spent on housing.
- Geographical Variations: House prices crept up at a slower pace than inflation in Germany in 2024, but outpaced inflation in many other EU countries[5]. This variation suggests that housing costs relative to income can differ significantly across countries.
- Income vs Housing Cost Overburden: Eurostat data indicates that the housing cost burden (i.e., housing costs exceeding 40% of disposable income) varies based on income quintiles and household types[1][4]. This suggests that the percentage of income spent on housing can be impacted by factors like household income level and type.
- Urban Pressure: Dense urban areas, particularly major cities in Germany, may experience high demand for housing. Combined with limited supply, this demand could lead to a higher housing expenditure relative to income in urban regions.
For a clear-cut answer as to why Germans disburse a larger chunk of their income on housing, more specific Eurostat statistics or research focusing on the German housing market would be essential. However, an uptick in housing costs and regional economic conditions are likely key contributing factors.
[1] https://ec.europa.eu/eurostat/web/housing/data/database[4] https://ec.europa.eu/eurostat/statistics-explained/index.php/Housing_costs_over-burden_rate_(percentage_of_Persons_spending_more_than_40_of_their_disposable_income_on_housing_costs)[5] https://ec.europa.eu/eurostat/documents/2995521/9661907/3-21012024-AP-EN.pdf/7bc0c2c8-8dd8-8760-48c9-fd38bf290ad7
- Apartment
- Germany
- Europe
- Statistics
- Federal Statistical Office
- BSW
- Sahra Wagenknecht
- The Federal Statistical Office (Bundesamt für Statistik, or BSW) suggests that the Community policy for housing should be revisited, and vocational training in financing personal-finance management and apartment rental processes could be incorporated to help reduce the housing burden.
- Vocational training programs focused on the management of personal finances and housing could be implemented across communities in Germany to help individuals better understand and manage their housing costs, thereby reducing the average percentage of income spent on housing.
- The chairwoman of the BSW, Sahra Wagenknecht, emphasizes that for vocational training initiatives to make a significant impact, they must focus on enabling people to afford housing in Germany while maintaining the creation of non-profit housing within the housing market.
- In comparison to other European countries, an average German spends considerably more of their income on housing, with only Danish and Greek residents spending more, according to Eurostat statistics reviewed by BSW in 2024.