German Tenants Overwhelmed by Housing Costs, Study Finds

Around 3.2 million of Germany's nearly 20 million tenant households spend more than 40 percent of their net income on housing. This is shown by a current study by the Institute for Housing and Environment (IWU) on behalf of the Tenants' Association.

According to the study, another 3.4 million households spend between 30 and 40 percent of their net income on basic rent and heating costs. From the perspective of IWU and the Tenants' Association, this means that a total of about 6.6 million tenant households – or one in three – are overextended.

"Alarming Figures"

The President of the German Tenants' Association, Melanie Weber-Moritz, speaks of alarming figures. "The federal government must now protect tenants from further burdens." The study is based on data from the most recent Mikrozensus 2022 on income and rents. The figures were updated to the latest available status of 2024 based on data from the Federal Statistical Office (Destatis).

According to this, 42 percent, or 8.3 million, of tenant households belong to the lower income third: they have an average household net income of 1,417 euros per month. This group is at its "financial limit" with its housing costs. "The bottom ten percent of the income distribution are particularly affected, with an average housing cost burden of 60 percent," the study states.

Germany Above EU Average

The Federal Statistical Office, on the other hand, sees a smaller portion of the population overextended by their housing costs. In 2025, 11.2 percent of people in Germany, or about one in nine, were affected, the authority announced in mid-May based on earlier European data. However, this included both rental and owner-occupied households.

Another reason for the different figures: The statisticians draw the line more strictly, only classifying households as overextended if they spend more than 40 percent of their income on housing. According to the IWU data, this would be 16 percent of tenant households.

According to Destatis data, Germany was above the EU average of 7.7 percent last year. Overextension due to housing costs was even more widespread only in Denmark (23.4 percent) and Greece (26.4 percent). Households in Croatia (3.2 percent) and Cyprus (2.4 percent) were least overextended.

New Tenants Pay Significantly More

The increase in rents is driving up the housing cost burden for many German households – especially for those who have recently moved, writes the Tenants' Association. Rents in contracts signed from 2020 onwards are on average a good fifth higher, and tenant households have since faced a significantly higher burden of 33 percent compared to households that moved in earlier.

Major cities are particularly affected: In Berlin, rents for households that moved in after 2020 are on average 29 percent higher than the average across all rental contracts. In Munich, it is 26 percent, and in Frankfurt, 25 percent.

The reason behind this is that many people who have an affordable rental contract are reluctant to move – this effectively freezes the rental markets. The housing cost burden in metropolitan areas is over 30 percent, and for new rental contracts, it is even over 35 percent, according to the Tenants' Association.

Tenants' Association Demands Stricter Rent Brake and More Social Housing

"The spiral of ever-increasing rents must be stopped. To achieve this, the federal government must enforce the planned stricter penalties for rent gouging, tighten the rent brake, and punish violations with significant fines, so that tenants are finally protected from illegal rent overcharging," demands Weber-Moritz.

The rent brake, which applies in tense housing markets and until 2029, must be made permanent and effective nationwide. Even in Berlin, only in five percent of cases examined by the rent control office were the rents "legally permissible according to rent control regulations," the Senate Department for Urban Development, Building and Housing recently announced.

The Tenants' Association further demands that the stock of social housing should increase from the current 1.1 million to at least two million units by 2030. There should also be more public housing to "establish a permanently price-bound and affordable segment" in the rental housing market.