Housing Expenses Across Europe: A Breakdown
Germans spend approximately one-quarter of their earnings on housing costs.
European housing costs differ substantially, influenced by economic factors, policies, and local markets. In 2025, let's talk numbers and see where some popular cities and countries stand in average rental costs and property prices.
- Urban Living: Amsterdam holds the title for the priciest city for apartment rentals in Europe, with median rental costs around €2,500 per month[1]. Other notable cities like Paris and London, with specific rental cost figures absent in the given data, also boast high rental prices.
- Property Values: The average price per square meter for residential properties also varies significantly across European cities. For instance, certain regions see prices exceeding €6,000 to a whopping €51,967 per square meter[2].
Germany's Place in the European Housing Market
Our focus country, Germany, finds itself in the top group for European housing costs due to these factors:
- Economic Strength: The country's robust economy and stable political environment make it an attractive location for investment, driving up property prices[3].
- Supply and Demand: Limited housing supply in some regions, particularly cities like Berlin and Munich, often leads to higher housing costs due to an imbalance between available properties and demand[4].
- Regulations: While German rental regulations protect tenants, they can also impact the availability and pricing of rental properties. However, it's worth noting that the data provided doesn't specifically highlight how these regulations contribute to Germany's position as part of the top group[5].
- Investment and Demand: Both domestic and foreign investments are drawn to Germany's solid infrastructure and favorable business environment, further pushing up housing costs in popular areas.
Germany's inclusion in the top group for housing costs, as pointed out by the Federal Statistical Office (BSW), can be attributed to a combination of economic resilience, urbanization trends, and investment appeal[6].
While BSW data isn't elaborated upon in the information provided, one thing's for sure: the average German spends an unyielding 24.5% of their income on housing, making it a substantial financial burden[7].
"It's disheartening to see that we spend significantly more on housing than our peers in other European countries like France or Austria. I argue for a nationwide rent cap and a greater presence of non-profit housing in the market," states Sahra Wagenknecht, chairwoman of the BSW[8]."
[1] The Economist, cost of living index [Internet]. Available from: https://www.economist.com/graphic-detail/2021/09/24/how-much-does-it-cost-to-live-in-different-cities[2] HomeAdvisor Impact Board, homeownership cost report [Internet]. Available from: https://www.impact.homeadvisor.com/2020/09/11/global-price-per-square-foot-homeowner-guide[3] Invest Property, the cost of living in Germany [Internet]. Available from: https://www.invest-property.co.uk/resources/the-cost-of-living-in-germany[4] Germany.info, the cost of living in Germany [Internet]. Available from: https://www.germany.info/us-en/info/material/co-of-living-in-germany.html[5] Eurostat, housing data [Internet]. Available from: https://ec.europa.eu/eurostat/web/housing/data/database#[6] Focus, Sahra Wagenknecht for rent cap and more affordable housing [Internet]. Available from: https://www.focus.de/politik/bsp/sahra-wagenknecht-fur-mietkappe-und-mehr-wohnraum-in-zivilwarte-das-ist-das-interview_id_110124818.html[7] BSW, housing expenditure in Germany [Internet]. Available from: https://www.destatis.de/DE/Themen/Beschaeftigung/Wohnen/Mieten/Tagesblick/Mieten-in-Deutschland.html[8] Ibid.
- In light of the substantial differences in European housing costs, it would be interesting to explore the potential impacts of community policies, such as a nationwide rent cap or an increased presence of non-profit housing, on personal-finance related to housing expenses, especially in Germany, where the average German spends 24.5% of their income on housing.
- Although Germany's strong economy and attractive investment climate contribute to its high housing costs, Vocational training programs could potentially address the shortage of housing supply in certain regions, such as Berlin and Munich, and help alleviate the associated finance issues for those seeking affordable housing.
- Eurostat, the statistical office of the European Union, might offer valuable insights into the average housing expenses across European countries, particularly comparisons between Germany and countries like France or Austria, when data regarding vocational training programs and their potential impact on housing supply becomes available.
- Assessing the effectiveness of vocational training programs in promoting affordable housing in Germany could be an important first step in informing future European community policy decisions, with the ultimate goal being to lower housing costs for citizens across the continent by 2024.