Since 2016, rents in Germany have risen by an average of five percent per year. According to the latest Housing and Rent Report, many low-income households have to shell out almost half of their income on rent. 

46 percent on rent

It’s no secret that rents are rising rapidly in Germany, but it is still concerning when the facts are laid bare. The Federal Ministry of the Interior, Building and Community’s Housing and Rent Report for 2018 shows that rents in the federal republic rose by an average of five percent per year between 2016 and 2018. In Germany’s biggest cities, the increase was six percent per year. 

The figures also show that these rent increases hit low- and middle-income families the hardest. According to the report, households with net incomes below 1.300 euros per month now spend an average of 46 percent of their income on rent.

Single-earners are also affected, having to spend more than a third (34 percent) of their income on monthly rent, while the average four-person household spends about a quarter (24 percent). Overall, the average resident in Germany has to shell out 29 percent of their income on rent. 

Huge rent regional differences

The Housing and Rent report also laid bare some rather stark regional differences. It is perhaps no surprise that rents in rural areas are much cheaper than in inner cities, but what is striking is the magnitude of the difference, ranging from 4,50 per square metre in rural Vogtlandkreis (the cheapest), to 17,73 euros in central Munich (the most expensive). 

It seems that the East / West divide in rent prices is also beginning to diminish: while rents in western cities like Cologne and Essen did jump, prices in eastern cities such as Leipzig and Dresden rose equally significantly. 

For 2018 overall, the average rent in Germany was 10,88 euros per square metre in the largest 19 cities (Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, Düsseldorf, Dortmund, Essen, Leipzig, Bremen, Dresden, Hanover, Nuremberg, Duisberg, Bochum, Wuppertal, Bielefeld and Bonn). In smaller cities, the average price was three euros lower, and in rural areas, a square metre of space is a bargain at 6,50 euros, on average.

More apartments and more housing benefit

To tackle the increasing unaffordability of housing, the government pledged to increase the amount of housing benefit (Wohngeld) given to low-income families. The benefit payments could increase from 145 to 190 euros per month for a two-person household. From 2020, as many as 660.000 households could be eligible to receive the benefit, an increase of 180.000.

In the report, the federal government also reiterated its target of building 1,5 million homes by the end of 2021. Last week, plans were revealed to invest an extra billion euros per year to fund the construction of social housing.