Prague Economic Papers 2025, 34(1):78-97 | DOI: 10.18267/j.pep.885

Housing Affordability in Germany and its Dynamics

Felix Florian Balz ORCID...
University of Finance and Administration, Prague, Czech Republic

The study examines housing affordability in Germany from 2017 to 2023 in light of rising real estate prices and challenges in the housing market. It uses the Housing Affordability Index to identify trends and patterns and propose policy measures to tackle the problems. The results show regional differences, with large cities in particular facing rising prices. Overall, the housing affordability burden has worsened across the country, with the western federal states being particularly affected. Future research should focus on evaluating policy measures and analyzing future trends in order to develop appropriate strategies and make predictions for the future.

Keywords: housing affordability, housing affordability index, property price boom, real estate, real estate economics, real estate price bubbles, residential property
JEL classification: D23, R2, R21, R3, R31

Received: July 24, 2024; Revised: November 24, 2024; Accepted: January 22, 2025; Published: May 7, 2025  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Balz, F.F. (2025). Housing Affordability in Germany and its Dynamics. Prague Economic Papers, 34(1), 78-97. doi: 10.18267/j.pep.885
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Arnold, D., Landgraf, D. (2017). Affordability of housing. In: Residential real estate (original language: "Erschwinglichkeit von Wohnen. In: Wohnimmobilien"). Springer Gabler. Wiesbaden, Germany. https://doi.org/10.1007/978-3-658-05368-0_9 Go to original source...
    2. Cermáková, K., Hromada, E. (2022). Change in the Affordability of Owner-Occupied Housing in the Context of Rising Energy Prices. Energies, 15 no. 4: 1281. https://doi.org/10.3390/en15041281 Go to original source...
    3. Czischke, D., van Bortel, G. (2018). An exploration of concepts and polices on 'affordable housing' in England, Italy, Poland and The Netherlands. Journal of Housing and the Built Environment, Vol. 38, pp. 283-303. https://doi.org/10.1007/s10901-018-9598-1 Go to original source...
    4. Dr. Klein (2024). Privatkunden AG. Mortgage interest rate chart: Compare interest rate trends (original language: "Zinschart Baufinanzierungszinsen: Zinsentwicklung vergleichen"). Published on https://www.drklein.de/zinsentwicklung-prognose.html#!/, last viewed on 18th of March 2024.
    5. Federal Statistical Office (Destatis). (2023). Income of private households in the independent cities and districts of the Federal Republic of Germany 1995 to 2021, Series 2, District Results Volume 3 (original language: "Einkommen der privaten Haushalte in den kreisfreien Städten und Landkreisen der Bundesrepublik Deutschland 1995 bis 2021").
    6. Immowelt GMBH. (2024). Real estate price search tool, 2024. Published on https://www.immowelt.de/immobilienpreise/deutschland/hauspreise, last viewed on 18th of March 2024.
    7. Kadi, J., Banabak, S., Plank, L. (2020). The return of the housing issue (original language: "Die Rückkehr der Wohnungsfrage"). Factsthee VII, February 2020, Vienna, Austria.
    8. Kholodilin, K., Rieth, M. (2022). Real estate market stable so far - but risk of price corrections has increased (original language: "Immobilienmarkt bisher stabil - aber Risiko für Preiskorrekturen hat zugenommen"). DIW Wochenbericht, ISSN 1860-8787, German Institute for Economic Research (DIW), Vol. 89, Iss. 47, pp. 611-620. Berlin, Germany. https://doi.org/10.18723/diw_wb:2022-47-1 Go to original source...
    9. Le Goix, R., Ysebaert, R, Giraud, T., Lieury, M., Boulay, G., Coulon, M., Rey-Coyrehourcq, S., Lemoy, R., Ramasco, J. J., Mazzoli, M., Colet, P., Theurillat, T., Segessemann, A., Marcinczak, S., Bartosiewicz, B. (2021). Unequal housing affordability across European cities. The ESPON Housing Database, Insights on Affordability in Selected Cities in Europe. European Journal of Geography. https://doi.org/10.4000/cybergeo.36478 Go to original source...
    10. National Association of Realtors. (2017). Housing Affordability Index: Methodology. Retrieved from National Association of Realtors: https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index/methodology.
    11. Nwuba, Ch. C., Kalu, I. U. (2018). Measuring Housing Affordability: The Two Approaches. Department of Estate Management Kaduna Polytechnic, Kaduna, Nigeria. ATBU Journal of Environmental Technology 11, 1st of June 2018.
    12. Stawarz, N., Sander, N., Sulak, H. (2020). Internal migration and housing costs - A panel analysis for Germany. Population, Space and Place Journal, John Wiley & Sons Ltd., Vol. 27, Iss. 4. https://doi.org/10.1002/psp.2412 Go to original source...
    13. Torluccio, G., Dorakh, A. Housing Affordability and Methodological Principles: An Application, 2011. Department of Management, University of Bologna, Italy, and Belarus State Economic University, Minsk, Belarus. International Research Journal of Finance and Economics, ISSN 1450-2887, Iss. 79.
    14. Winke, T. (2020). Housing affordability sets us apart: The effect of rising housing prices on relocation behaviour. Urban Studies, Vol. 58, Iss. 12. https://doi.org/10.1177/0042098020943482 Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content