Renting is becoming more affordable

The rising rents are a burden for many Germans. At the same time, they have become more affordable in most parts of Germany. Who profits – and who is left behind.

Newly built apartment buildings in the Europaviertel in Frankfurt: In most parts of Germany, renting accommodation has become more affordable.

IIn most parts of Germany, renting accommodation has become more affordable. This is the case in Hamburg, for example, in Cologne, Frankfurt and in many East German municipalities. That is the result of a study by the Institut der Deutschen Wirtschaft (IW). For this purpose, the authors compared the development of the gross median wage with the development of new contract rents. While the median gross wage in Germany rose by almost 10 percent to EUR 3,312 between 2014 and 2018, new contract rents only rose by 8.5 percent in the same period. Overall, wages have developed more positively than rents in 269 out of 401 districts in Germany. The authors conclude from this that rents in Germany have become more affordable overall because most tenants cover their housing costs from their wages.

Whether the tenants benefit from this effect depends very much on where they live. Looking at Germany, there is a tripartite division: in large parts of eastern Germany, rents have become much more affordable in recent years, especially in booming cities such as Leipzig and Jena. “There, too, the companies are increasingly suffering from a shortage of skilled workers and are prepared to retain or attract employees with significant increases in wages,” it says as a reason. At the same time, the rent development is not as dynamic as in large parts of western Germany, also because there is even more vacancy in the east, which is only slowly being reduced.

The south of Germany is left behind

In most West German municipalities, rents and wages have risen at roughly the same rate, so that rents have remained affordable. Tenants in Bavaria and Baden-Württemberg in particular are at a disadvantage. In Munich and the surrounding communities, wages have increased significantly less than rents. The worst hit was tenants in Kempten im Allgäu: Here wages have increased by 10 percent, but rents by 33 percent.

In Berlin, too, where the protest against higher rents is particularly loud and the city has been trying to counteract this by capping rents since the beginning of the year, the ratio was unfavorable. In Hamburg, on the other hand, where more apartments are being built than in the capital, although the city is only half the size, tenants are now doing better than before. However, it is also true that not all employees have benefited equally from the dynamic development of wages in recent years – just as existing tenants have not suffered as much from rising rents as people who have moved.