Housing market: Study: Rent affordability is declining

According to a study, when tenants move in Germany, they can often only afford smaller apartments.

Housing market: Study: Rent affordability is declining

According to a study, when tenants move in Germany, they can often only afford smaller apartments. According to a study published by the Cologne Institute for Economic Research (IW) in three quarters of German districts and urban districts, the affordability of rents decreased between 2018 and 2021.

This means that the rents demanded for new rentals have risen more sharply than wages. The IW experts used data from rental advertisements for their calculations.

Where is housing most expensive and where is it cheapest?

It was most expensive in Munich. According to the short study, a single household with a middle income could only afford a 36 square meter apartment there - provided they wanted to spend a maximum of a quarter of their net wages. In Freiburg and Frankfurt am Main, the tenants also had to dig deep into their pockets after moving in.

On the other hand, it was cheapest in Holzminden, where a single person with a middle income could afford a 102 square meter apartment if he did not want to spend more than a quarter of his monthly net income. The Südwestpfalz (100 square meters) and Salzgitter (98) were also cheap.

Dark prospects for the future?

Only data up to the end of 2021 were evaluated for the study. With a view to the currently very high level of inflation and sharply rising energy costs, the authors Pekka Sagner, Julia Sprenger and Michael Voigtländer warn of negative consequences for the housing market.

They assume that many people in large cities want to move but do not do so for cost reasons - especially young workers, students and families with small children. "As a consequence, overcrowding in apartments is likely to increase significantly." The "Rheinische Post" had previously reported on the short study.

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