Germany's High Housing Costs: A Burden on Pockets
Germans Spend One-Fourth of Their Earnings on Housing Expenses
In the realm of expenses, housing stands tall. For many, it's a hefty burden, particularly with low incomes. A striking statistic emerges: compared to other European countries, Germany's living costs, especially housing, are sky-high.
On average, Germans shell out every fourth euro they earn on housing. Figures from Eurostat, analyzed by the Federal Statistical Office (FSO) upon request by the BSW, paint this scenario. In terms of income, housing is nearly in a league of its own when it comes to expense in Europe, the BSW points out.
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Last year, Germans doled out 24.5% of their earnings on rent or other housing-related expenses, such as owning a home. This is over 5% more than the EU average. While improvements have been noted compared to 2023, Germany still finds itself in the "European luxury housing" segment, the BSW stated.
Countries like France, Austria, or the Netherlands report significantly lower figures. People at risk of poverty in Germany spent an average of 43.8% of their income on housing costs, which is almost every second euro, according to the data.
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In 2024, Denmark topped the list with an average housing cost share of 26.3%, closely followed by Greece at 35.5%. Sweden was on par with Germany. Meanwhile, housing cost shares were remarkably low in Cyprus (11.4%), Malta (12.5%), Italy, and Slovenia (each 13.6%). The EU average stands at 19.2%.
"Countries like France or Austria spend significantly less on housing shows that it can be done differently," said BSW chairwoman Sahra Wagenknecht. She advocates for a nationwide rent cap and a larger share of non-profit housing in the housing market.
Though the provided data does not explicitly explain why Germans spend a higher percentage of their income on housing compared to other European countries, it's worth noting that house prices in Germany, along with France, Luxembourg, Austria, Romania, Finland, and Sweden, rose less than inflation in 2024 [5]. This suggests that, while housing costs are high, they may not be escalating at the same alarming rate as in some other EU countries where price increases outpaced inflation.
[1] ntv.de[2] ec.europa.eu/eurostat[3] bsi.bund.de[4] europa.eu/statistics[5] N/A (Implicit Data from search results, more detailed Eurostat data needed for confirmation)
- The community policy could consider implementing measures to address the high housing costs in Germany, such as a nationwide rent cap and an increased share of non-profit housing in the housing market.
- Vocational training programs might help people, particularly those at risk of poverty, to improve their personal-finance skills and reduce their housing expenses.
- Although housing costs in Germany are significantly higher than the EU average, the percentage increase in house prices in Germany compared to inflation in 2024 was less than many other EU countries.
- According to Eurostat data, housing expenses account for approximately 24.5% of the average German's income, which is over 5% more than the EU average. This figure is even higher for those at risk of poverty, who spend almost every second euro on housing costs.