Most Expensive German Cities for Residents in 2024

In 2024, eight German cities were ranked among the 100 most expensive cities in the world, with Berlin surpassing Munich to claim the top spot. The annual Mercer Cost of Living survey, known for its surprises, revealed that the German capital, once famous for being “poor but sexy,” is now the most expensive place to live in Germany. Berlin jumped six places since last year to rank as the 31st priciest city globally. Here are Most Expensive German Cities for Residents in 2024.

Despite a constitutional rent brake aimed at curbing significant rent hikes, apartment costs in Berlin surged by almost 20 percent last year. Tenants’ associations argue that most rents are illegally high. Additionally, high inflation following Russia’s invasion of Ukraine has driven up the cost of everyday goods and services, contributing to Berlin’s rise in the Mercer rankings.

However, Berlin is not the only German city with a high cost of living. Frankfurt, with its robust banking sector, climbed 13 places over the past year, making it the second most expensive city in Germany, ahead of the typically costly Munich. The Bavarian capital, known for its high rents and luxury apartments, landed in 38th place globally, three spots behind Frankfurt and five behind Berlin.

Berlin, Frankfurt, and Munich were the only German cities to make it into the top 50 priciest cities worldwide. Other German cities in the top 100 include:

• • Düsseldorf (51)
  • Hamburg (54)
  • Stuttgart (70)
  • Nuremberg (85)
  • Leipzig (86)

Globally, Hong Kong topped the rankings, followed by Singapore and the Swiss cities of Zurich, Geneva, and Basel.

Why is Berlin So Expensive These Days?

Berlin is experiencing a severe housing shortage, exacerbated by the high demand in the capital. Approximately 35,000 people move to Berlin each year, with estimates suggesting the city’s population could reach almost four million by 2030. Following the fall of the Berlin Wall, the city underperformed economically compared to other major European capitals and was known for its affordable rents. However, over the past decade, Berlin has attracted significant investment from tech giants like Google, Zalando, and Amazon, driving up rents.

Despite the high costs, Berlin scored well for quality of life, ranking 18th globally. The Mercer rankings consider various factors, including housing costs and the price of 200 everyday goods, such as groceries, toiletries, entertainment, and public transport. This year, the data was recorded in March 2024, helping companies determine rates and perks for remote employees based on local living costs.

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