One in three German renter households burdened by housing costs

About one in three renter households in Germany is financially overstretched by housing costs, according to a study commissioned by the German Tenants' Association.

The study by the Institute for Housing and Environment (IWU) found that around 6.6 million renter households spend more than 30% of their net income on rent and heating, including 3.2 million that devote more than 40%.

Germany has nearly 20 million renter households and 42% of them belong to the lowest third of the income distribution, with average monthly net household income of about €1,417 ($1,648), the study said. It said this group was at its "financial limit" due to housing costs.

The lowest-income 10% spend an average of 60% of their income on housing.

The tenants' association called the findings alarming and urged the government to strengthen protections against excessive rent increases.

Germany's Federal Statistical Office paints a less severe picture. Based on European statistical data, it estimated that 11.2% of people in Germany, or about one in nine, were overburdened by housing costs in 2025. The agency classifies households as overburdened only if they spend more than 40% of their income on housing.

The study pointed to rising rents as a key driver of the burden, particularly for people who moved into new homes in recent years. Rental contracts signed since 2020 are on average more than 20% more expensive than older agreements.

The gap is especially pronounced in major cities. New tenants in Berlin pay rents that are on average 29% higher than the average across all rental contracts, compared with 26% in Munich and 25% in Frankfurt. Many people with affordable existing leases are reluctant to move, effectively freezing parts of the rental market.

The tenants' association called for stricter rent controls, tougher enforcement against excessive rents and a significant expansion of social housing to improve affordability.