Dropping a Bombshell: Germans Shell Out Nearly a Third of Their Income on Housing Costs
Every German fourth euro is allocated towards meeting living expenses. - Approximately 25% of money spent by residents of Germany goes towards housing expenses.
You heard it right! German inhabitants couldn't help but part with 24.5% of their hard-earned money on rent, property ownership, or other housing expenses last year, as per the latest figures. This whopping figure is 5.3 percentage points higher than the EU average (19.2%). Talk about a hard hit to the pocketbook!
Despite a slight improvement from 2023, Germany ranks high on Europe’s list of expensive housing. Countries like France, Austria, and the Netherlands, on the other hand, seem to have found the secret to keeping housing costs at bay. How? Well, they have managed to keep the average at significantly lower levels.
But what about those at risk of poverty in Germany? Hold onto your hats, because they were shelling out an average of 43.8% of their income on housing – that's almost every second Euro!
While Denmark and Greece rank higher in housing costs (26.3% and 35.5% respectively), Germany still maintains its high-housing cost reputation. On the flip side, Cyprus, Malta, Italy, and Slovenia report some of the lowest housing cost shares in Europe, at a mere 11.4%, 12.5%, 13.6%, and 13.6% respectively.
"Germany’s housing system is a recipe for impoverishing large sections of the population," said BSW chairwoman Sahra Wagenknecht to news agency AFP. "People in countries like France or Austria prove that it can be done differently," she emphasized, citing lower housing costs in these countries.
Wagenknecht called for a nationwide rent cap and a higher share of non-profit housing in the market. If implemented, perhaps this could help Germany move closer to its ambitious goal of affordability.
- *
Key Insights:- German households spend a significant portion of their income on housing, with many poor households shelling out over 40% and some even reaching above 50%. Major cities like Berlin and Munich are particularly affected by rapidly escalating rents.- Other EU countries such as France, Austria, and the Netherlands have generally lower housing costs compared to Germany, typically hovering around the 27-30% affordability guideline. However, local variations exist.
Sources: [1][5]
In light of the high housing costs in Germany, it might be beneficial for the community to implement policies that focus on vocational training, especially in areas like construction and real estate, to help reduce costs and increase affordable housing options. This could potentially improve personal-finance scenarios for many German residents.
Additionally, to better competitively align with countries like France and Austria, which have lower housing costs, Germany could explore financing options for businesses involved in vocational training programs related to housing solutions, such as affordable home building or green energy initiatives for housing, which could eventually reduce the overall cost of housing in the country.
