Sky-High Housing Costs in Germany: Tale of the Fourth Euro
Germans spend an average of one fourth of their earnings on housing costs.
In a nutshell, housing expenses make up a substantial portion of people's income in Germany, with an average of one-fourth euro being spent on housing-related costs.
Take a look at the numbers: According to the European statistical office Eurostat and the Federal Statistical Office, Germans spent 24.5% of their income on rent or housing expenses last year, a whopping 5.3 percentage points over the EU average. Even though there has been a slight improvement compared to 2023, Germany remains in the "European top group" for housing costs, as noted by the Federal Statistical Office.
On a global scale, countries like France, Austria, and the Netherlands have significantly lower housing expenditures. In fact, individuals at risk of poverty in Germany spend an average of almost 44% of their income on housing — close to every second euro.
Danish Dilemma, Greek Grip: Where Do Housing Costs Soar?
Here's an intriguing factoid: in 2024, Denmark had the highest average housing cost share (26.3%), just a smidgen ahead of Germany. Meanwhile, Greece came in with a startling 35.5%! Surprisingly, Sweden showed parity with Germany in housing costs. On the flip side, Cyprus registered a comparatively low housing cost share of 11.4%, followed by Malta (12.5%), Italy (13.6%), Slovenia, and the EU average (each at 19.2%).
What About the Rest of Europe?
The housing cost distribution across Europe is quite diverse, with significant differences between countries. With rising rental costs seen in cities like Amsterdam, which boasts sky-high rents nearing 2,500 euros per month, it's clear that some urban areas have inflated housing markets[1][5]. Meanwhile, some Eastern European countries, like Portugal, Hungary, and Lithuania, have experienced considerable real house-price growth[2][3]. Urban areas tend to have a higher percentage of households with high housing costs compared to rural areas.
Room for Improvement: The Call for Action
BSW chairwoman Sahra Wagenknecht has spoken out about the potential for alternative housing policies, arguing that countries like France and Austria demonstrate that housing costs can be better managed. Wagenknecht advocates for nationwide rent caps and an increased presence of non-profit housing in the market to address this issue.
References:
[1] “Apartment rents in Amsterdam exceed 2,500 euros per month” - Housing Today (2022)
[2] “European House Price Report” - European Central Bank (2023)
[3] “France’s housing market remains weak in comparison to other EU countries” - Le Figaro (2024)
[4] “German housing market recovery in the face of European fluctuations” - Deutsche Wirtschaftswoche (2024)
[5] “High rental costs in Amsterdam and other major European cities” - Urban Europe (2021)
Community policy discussions may increasingly focus on addressing rising housing costs, given that in 2024, Denmark had the highest average housing cost share (26.3%) followed by Germany (24.5%). Austria and France demonstrate potential strategies for better housing cost management. Vocational training could play a role in personal-finance education to help people make informed decisions about housing expenses. The finance sector could consider vocational training programs to equip individuals with the necessary skills to navigate their housing costs effectively.
