Germany's housing market remains particularly expensive, despite attempts to improve the country’s housing shortage.
Of the 8,4 million households with a rental apartment in a major German city, almost half of them spends more than 30 percent of their net income on rent, according to a study by the Humboldt University of Berlin. The study, which was sponsored by the Hans Böckler Foundation, also found that a quarter of households spend at least 40 percent of their income on living costs, including rent, home utilities and ancillary costs. 12 percent of households spend more than 50 percent of their income on rent.
The study found that people spending a higher proportion of their income on rent is a nationwide issue and does not affect any specific “type” of city. So, people spend a similar proportion of their income on rent and living costs in both expensive cities like Düsseldorf and Wiesbaden, as well as poorer cities like Mönchengladbach and Bremerhaven. This is because while rents are lower in poorer cities, incomes are lower too.
The Federal Statistical Office (Destatis) has also revealed the extent to which Germans are being overburdened by their housing costs. According to Destatis, in 2019, 14 percent of Germany’s population (around 11,4 million people) were a part of a household that was overburdened by housing costs. Destatis considers a household “overburdened” when it spends more than 40 percent of its available income on housing costs, no matter if they are renting, or paying off a mortgage.
Researchers at the Humboldt University of Berlin used data from the 2018 micro census for their study. According to this data, the financial burden on households has declined over the past few years, mainly due to residents’ income increasing more than housing costs have in larger cities. According to Destatis, the burden on households has been declining since 2014. However, many poorer households continue to struggle financially with their rent.
The researchers pointed to the lack of small, inexpensive apartments on the market, the supply of which is only getting smaller. Despite the housing shortage being relieved slightly in recent years, the study found that, even if you distributed the available living space in the best way possible, 1,5 million households could not be supplied with adequate, affordable housing.