Ouch, Germans Are Spending a Pretty Penny on Housing!
Roughly one-quarter of Germans' earnings are spent on housing expenses.
It's no secret that housing costs are a major expense, and when income is low, it weighs even heavier. A statistics report shows: Compared to other European countries, living in Germany is expensive, especially when it comes to housing.
Germans, on average, part with every fourth euro on housing costs. According to the European statistical office Eurostat, evaluated by the Federal Statistical Office (BSW) on request, Germany ranks high in housing costs, with housing being almost nowhere in Europe as expensive as here. This criticism is valid, as the BSW points out.
The BSW stated that the share of Germans' income spent on rent or other housing costs in 2022 was 24.5 percent. That's 5.3 percentage points more than the EU average. Although the figures have slightly improved compared to 2023, Germany still ranks high among European countries.
In comparison, countries like France, Austria, and the Netherlands have significantly lower values. The situation is particularly dire for those at risk of poverty in Germany, who spend an average of 43.8 percent of their income on housing, almost every second euro.
Denmark takes the crown for the most expensive housing with an average share of 26.3 percent, while Greece is a close second with 35.5 percent. Fortunately, countries like Cyprus, Malta, Italy, and Slovenia have significantly lower housing cost shares, at 11.4 percent, 12.5 percent, 13.6 percent, and 13.6 percent, respectively. The EU average is 19.2 percent.
"The fact that in countries like France or Austria people spend significantly less on housing shows that it can be done differently," said BSW chairwoman Sahra Wagenknecht. She advocates for a nationwide rent cap, a higher share of non-profit housing in the housing market, and more affordable housing to address these rising costs.
Now, What's the Deal with These Sky-High Housing Costs?
Several factors contribute to the high housing costs in Germany. For instance, the country faces a national housing shortage, with only a small percentage of the existing stock available for purchase or rent, leading to increased competition and higher prices. Additionally, rents have increased significantly over the past decade, outpacing income growth. As a result, a substantial portion of available flats become unaffordable for average renters, particularly those on low incomes.
What Can Be Done About These High Housing Costs?
To address the high housing costs, several policies have been suggested or implemented. These include increasing the supply of affordable housing, implementing rent control measures, offering financial assistance to low-income households, encouraging a mix of housing types, and proper urban planning.
The goal is to make housing more affordable for everyone, reduce the burden of housing costs on people's lives, and create a fairer housing market. Let's get those high housing costs under control before every euro we earn slips through our fingers!
Sources: ntv.de, hul/AFP • Apartment • Germany • Europe • Statistics • Federal Statistical Office • BSW • Sahra Wagenknecht
Notable Information- Germany faces a national housing shortage, leading to increased competition and higher prices.- Rents have risen significantly over the past decade, outpacing income growth.- Many countries have been able to spend significantly less on housing, showing that it can be done differently.- To reduce the burden of high housing costs, policies such as increasing the supply of affordable housing, implementing rent control measures, offering financial assistance to low-income households, and proper urban planning have been suggested or implemented.
- The community policy could focus on addressing the national housing shortage in Germany, a key factor contributing to the high housing costs, by increasing the supply of affordable housing.
- Although Germans, on average, spend every fourth euro on housing costs, this expense could be reduced through vocational training programs for individuals working in the construction and real estate sectors to increase the housing stock.
- In light of the high housing costs in Germany, personal-finance experts might advise residents to allocate funds towards vocational training in areas such as energy efficiency and renovations to make their homes more affordable.
- Eurostat's data shows that Germany ranks high in housing costs among European countries, with housing costs almost nowhere in Europe as expensive as they are here. By 2024, it might be beneficial for the German government to invest more in finance programs aimed at making housing more affordable for its citizens.