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Where in Germany are rent burdens highest for workers?

Where in Germany are rent burdens highest for workers?

The monthly frigid rent has now reached a level where it makes up more than a third of the typical salary in several communities throughout the seven main German cities. Renting a property has become an increasingly painful expense for inhabitants in Germany’s busiest urban hubs.

To determine how much of their salary inhabitants are spending on rent, a recent study by Berlin-based data provider 21st Real Estate examined the relationship between income and rent in Germany’s seven largest cities.

Berlin stands out as the city

    • Berlin has the highest net income-to-rent discrepancy in Germany.
    • The average cost ratio for the entire city is a striking 32%.
    • High cold rents and relatively low average salaries characterize the situation in Berlin.
    • Munich has higher average rent rates compared to Berlin.
    • Berlin’s rental cost ratio of 32% is similar to Munich’s.

Rental cost ratios of Munich

    • Munich’s income-rent gap is due to residents earning an average of €57,259 annually.
    • These high earners are concentrated in expensive micro-locations with rental cost ratios exceeding 35%.
    • In contrast, Berlin’s equivalent neighbourhoods have a lower average income of €40,255.

Stuttgart ranks third

    • Stuttgart has a rental cost ratio of 29%.
    • Frankfurt follows closely with a ratio of 27%.
    • Cologne is the most cost-effective metropolitan area with a ratio of 26%.
    • Düsseldorf and Hamburg both have ratios of 25%.
    • Despite these figures, many city neighbourhoods still face rental cost ratios exceeding 30%.
    • In areas like Mitte and Nord districts north of the Elbe in Hamburg, rent consumes over 37.5% of the average salary in nearly every street.

The rental burden

    • Rent strain is notably lower in suburbs around major cities.
    • For example, Duisburg, near Düsseldorf, has a reasonable rental cost ratio of 13.4%.
    • The research is based on a review of 271,000 online flat listings and income calculations that consider micro-locations within streets and neighbourhoods.
    • Income statistics were provided by the market research firm GfK.
    • It’s important to note that the rental offers analyzed don’t necessarily represent finalized lease agreements.
    • Landlords rarely offer reductions due to the high demand for property in major urban areas.

In conclusion, the research highlights significant variations in Germany are rent burdens across major German cities and their suburbs. While urban centres like Berlin and Munich face high rental cost ratios, suburban areas offer more affordable housing options. The study underscores the importance of considering micro-locations and income disparities when assessing the affordability of housing in Germany’s metropolitan regions.

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