Research shows that residents of German cities spend half their salary on apartment rent

As per the study conducted by Hans Böckler Stiftung, an analyst at the University of Berlin, housing expenses of German households reach as much as 50% – an alarmingly large proportion.

Furthermore, considering the fact that this trend is common in almost every German city, this situation can be considered as nationwide.

Renting apartments in Germany continues to be the largest expense for residents of large cities, and the lower-paid segments of the population are hardest hit. In the course of study conducted by Stiftung, it was found that out of 8.4 million families who rent an apartment in one of the major German cities, almost one in two spends more than 30% of their net income on rental expenses. This concept includes direct payments to the landlord (Miete), as well as utility bills and ancillary costs. In total, all this is called Warmmiete – “warm rent”.

Notably, it is important to pay attention when looking for an apartment in Germany: for example, whether the landlord indicates the cost of housing, taking into account the “communal apartment” or without it (this case is called Kaltmiete).

Furthermore, out of total number of respondents, every fourth family spends as much as 40% for living expenses, and 12% of respondents – even up to half of the total. These findings are based on an analysis of 2018 micro census.

Spending a large portion of income on rent is a nationwide situation, common for every German city. Upon comparing various family budgets, it turns out that people spend approximately the same part of their income on certain types of apartments or houses. For example, if a resident of major cities like Dusseldorf or Wiesbaden spends 50% of their income on a three-room apartment located in the central district, then in smaller cities such as Mönchengladbach and Bremerhaven, about the same 50% will be spent to cover an apartment also located in its central area. The actual amounts, of course, will be different, but the proportion will remain the same, as in smaller towns, although the level of rent is lower, the level of salaries is comparably low as well.

Adding to this statement, a similar trend was revealed by the German Federal Statistical Office (Destatis). According to sociologists, in 2019, 14% of the German population (about 11.4 million people) expressed concern about the fact that their families are burdened by housing costs. Destatis categorized families that spent more than 40% of their available income on housing, be it rent or mortgage payments, as “financially overwhelmed”.

Despite the fact that, in comparison with 2014, the level of “workload” has slightly decreased, many poorer households continue to experience monetary rent difficulties.

Apartment rent in Germany is high due to housing shortage

University analysts note that the financial burden on households has decreased over the past few years, mainly due to the fact that residents’ incomes are growing faster than real estate prices in large cities. Overall, renters have spent an average of 29.6% of their income on housing in 2018, up from 31.2% in 2001.

Another problem, however, is worth noting – an almost catastrophic shortage of small, inexpensive apartments on the market. Their availability is decreasing every year, despite the fact that large cities have stepped up housing construction programs in the recent years. Despite all the measures, it almost impossible to quickly provide a living space for everyone. The Böckler Foundation estimates that even with the most efficient allocation of funds, 1.5 million households would not be able to obtain an adequate and affordable housing any time soon.