In Germany, nearly a quarter (25%) of personal expenditure is dedicated to housing costs.

expenses for essential needs: On average, German residents allocate approximately one-quarter of their earnings towards basic expenses

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2025 May 15 . 9:53 PM

2 min read

Residential Buildings Envelop Berlin's Urban Landscape

Shocking Housing Costs in Germany: What's Going On?

Every third euro spent in Germany goes towards housing expenses. - In Germany, nearly a quarter (25%) of personal expenditure is dedicated to housing costs.

Here's the scoop on the hefty housing costs that Germany residents face:

Germans are shelling out 24.5% of their hard-earned income on rent or other housing expenses, which is significantly more than the EU average. This means that one out of every four euros earned by a typical German goes towards housing. Ouch, right?

Comparatively, other European countries like France, Austria, and the Netherlands have housing cost shares that are significantly lower than Germany's. In fact, people in Germany at risk of poverty spend approximately every second euro on housing.

So, who's the winner here? Unfortunately for Germany, not so much. There are plenty of countries that beat Germany's inflated housing costs. For instance, the average housing cost share in Denmark is higher (26.3%), with Greece coming in as the grand champion (35.5%). On the other hand, countries like Cyprus (11.4%), Malta (12.5%), Italy (13.6%), and Slovenia (13.6%) seem to have mastered the art of affordable housing compared to Germany.

Now, you might be wondering: why is Germany struggling so much with housing costs? BSW chairwoman Sahra Wagenknecht has some opinions: “Housing in Germany is a path to poverty for large parts of the population.” She goes on to explain, "this shows that there are other ways," and called for a nationwide rent cap and a higher share of non-profit housing in the market.

Insight:- Germany's significant housing cost problem (especially in major cities) is caused by factors like high demand, limited supply, and increased prices for rent and property.- The BSW advocates for measures like rent caps, increased affordable housing, government subsidies, and stronger regulations to address this issue.

In light of Germany's struggling housing situation, particularly in major cities, the BSW advocates for policy changes, such as implementing a nationwide rent cap, increasing affordable housing, and promoting stronger regulations. It's worth noting that personal finance, especially in terms of saving and budgeting, may be significantly strained by the 24.5% of income Germans typically spend on housing, a figure far exceeding many other European countries. Vocational training in areas like personal finance and business management could potentially help individuals manage their finances more effectively in this challenging housing market.