As far as I’m aware unless you manage to get into a rent controlled apartment which can be up to a multi year wait in some places, Germany has higher rent than the US(relative to wages)
This is not true. I googled it and multiple sources state that rent is significantly lower in Germany on average. This was the top result I got from Google for some reason. If anyone disagrees with this, feel free to post your own data. There is of course also a discrepancy in the nominal average wage but it seems to be quite a bit lower than the rent discrepancy. If the data I linked is correct, Americans would have to earn at least ~25% more (mean wages, for median wages it would probably have to be even higher) for your statement to be correct. The data I saw suggests that rent in Germany is on average lower relative to wages.
Why would it account for something like that? It's just an average by average comparison. If you exclude the units you're talking about, you're not giving a faithful comparison between average rent in both countries any longer, rendering the whole exercise useless.
I’m not saying they should always be ignored but I was going off of the story the person replied to. In situation they are describing a person would be unlikely to get into a rent controlled apartment. Meaning the only apartments available would be at a different average. If we’re just comparing nation to nation for the average citizen I think it would be fair to include them
The thing is, if you start that way you go down a very deep rabbit hole.
For example, "near a city" and "rural" have very different meanings for the US and for Germany. Living further than 50km away from a 100k inhabitants city is very hard in Germany.
So how do you account for states like Wyoming? Do you normalise rents by population density, because of course rents are different depending how urban you live.
The easiest way I guess would be to look at something like "average rent for new Rentners" because of how the German system favours long-term renters and it's the most applicable for someone moving to a country.
I'm not German myself so I can't really address this, but I still think this is not a useful way to think about the data. Here's what Google has to say about the percentage of German apartments that are put under rent control:
There is no single definitive percentage for rent-controlled apartments in Germanybecause "rent control" is not a single, universal system, but rather a complex patchwork of regulations that apply differently depending on the municipality and the type of housing. Germany's approach includes a "Mietpreisbremse" (rent brake) that caps new rents to 10% above the local average in high-demand areas, but this is applied only in certain municipalities and is not a form of outright rent control on existing tenancies.
If you would want to filter out every instance of what you could argue to be a form of rent control, it seems to me that you would massively distort the data and not end up with a clean but very cherry picked comparison. If these measures are so municipality dependent and omnipresent in the German housing and rent market, then you just have to accept that they are part of the average I'm afraid.
I still get your point, but it's a little bit like the often repeated talking point that "Americans have better healthcare if they can afford it" or "America isn't that unsafe if you don't live in urban centers" etc. Yeah, if we artificially curtail the data set, we can always create situations that look more favourable for one place or the other.
My point is that you aren’t randomly curtailing the data set. You are making the data set based on how it would apply to a specific group of people, in this case foreigners working overseas acquiring housing. Overall average are useful and more often than not should be used but data subsets can also have a legitimate purpose
I don't think you made that intention clear in your original comment (I reread it and you never mentioned anything about foreigners). But even then, why would these regulations not apply to immigrants? I don't quite understand the logic. Even if it's not always easy to get the most ideal apartment, the same would be true for the US, no? So you'd end up creating an unequal and cherry picked comparison by removing the more ideal (rent controlled) apartments. Some get lucky, others don't, but both should count equally in the average. That's the definition of an average afterall.
There is a rather sizable housing shortage in Germany. This means that there can be absolutely massive waiting lists to get into a rent controlled apartment. The minimum time is a couple months but it’s common for a wait list of a year. There are areas with even longer waitlists than that. If you are moving to Germany for work you won’t have the luxery of waiting before you have to move. So at minimum you are going to be in a non rent controlled apartment for months to multiple years. Depending on how long you are going to stay there for work you might not even get the opportunity to.
Something I’m also less familiar with is selection for rent controlled apartments. It may or may not be the case that foreigners on work visas will have reduced priority. I would love for someone with more knowledge to chime in on that specifically
All of that is fair, but I still don't see how it should affect the comparison above which was about relative rent to wage ratios. And like mentioned before, neither did your original comment specify that you were addressing the situation of foreigners/visa holders nor did you - up to this point - really deliver any source for your statement(s).
I guarantee you most people who read your original comment will take away that "rent is higher in Germany" or something like that without the myriad of caveats that keep getting added in the course of this conversation.
You wouldn't control for this, as it's part of the rental market. If Germany has more rent control than the US (I don't know if they do) it would still bring down the average costs for the average person.
I explain more further in my other comment chain but the reason I was asking for that subset of data is from the context of the original commenter. Someone who is moving to Germany for work or short periods of time is going to be very unlikely to be able to get rent controlled housing so the pricing of that is not useful
I was previously in a medium-size city and rent was OK, it wasn't a problem to have it under 30% of my salary.
However, the situation is absolutely insane in Munich. We are slightly above 30% (although in a larger apartment), but this is with two salaries. And I am quite sure the majority of the people earn considerably less. The situation isn't sustainable, even nearby cities are extremely expensive if you want to keep your commute time to less than 1h20 each way.
I believe there was another post here a few months ago that showed Munich was by far the most expensive place in Germany to rent, but then Munich probably also has Germany’s best job market. Must be somewhat like San Francisco or New York in that regard
Funnily enough at least in my field there are better opportunities outside of Munich, but I guess that's mainly due to it being a bit of a niche. But as couple it makes more sense for us to stay here due to the type of position my wife has.
We cannot, but this is what happens when global inflation happens paired with high immigration levels and decades of bad social planning. We'll recover back to our norm (where only Toronto and Vancouver are grossly overpriced) after some time, but housing supply isn't easy to fix.
Appreciated. It's much the same here, and in a few cities near me. Different numbers, of course, but similar percentages. Rent is around $3500 a month and salaries are about $10,000 a month
I grew up in the SF Bay Area (think one of the most expensive housing markets in the country, and Silicon Valley money ), I still know plenty folks that live all around there. Im deeply suspicious of this persons “average salary” number.
Idk I could be wrong, but I’d be curious to see the data they’re working off of and how it calculated that average.
Idk maybe I’m out of touch with inflation and all, but that sounds way way way too high
Edit: found this gov census data from New York City from 2023 (I think it’s the highest paying east coast city still?)
Says the Medien Household Income annually is 76.5 k
That would come out to roughly 6.4 k average a month. Still high but not near 10 k. That’s also with assuming these are all single earner incomes
Edit 2: this census data is also depicting median rent as a bit lower than I’d expect. I’m not sure how they got those numbers, but ill look into it more for my own curiosity. Haha Grains of salt are probably required when viewing any data (even if it is beautiful)
Edit 3: this drove me insane a little, it looks like the income data is congruent with other sources but the rent data does not line up with other numbers I can find anywhere (it’s more than double to rent an apartment in most sources I’m finding). I’m guessing it’s calculated based on what people are reporting for their personal rent payment, and that a lot are sharing apartments? I remember when I took census stuff they asked about my rent payment and not the total cost of apartment (from what I remember). However, it’s very weird that they don’t have that in the census imo? Am I crazy?
Yes and no. High income jobs are definitely more plentiful, and for those who are fortunate enough to get one, then they are sitting pretty. If not, then it's a real challenge to survive the cost of living in an environment where housing does not keep up with demand, leading to ever increasing costs for people who don't see their incomes keeping up with those increases. We're also at a point now where men graduating from college have the same unemployment rate as those who do not, which has not happened before. So the opportunities are dwindling.
In short, it's good to be rich in America. Otherwise, not so much.
I feel like the last statement is becoming the norm everywhere. I still cannot imagine how the majority of the people can afford to live in Munich. I know there are initiatives that allow you to rent cheaper places, but I have no clue how long one has to wait.
Haha yeah everyone I’ve met says Munich is nuts! It’s like how Americans talk about New York.
I’m living in Köln rn, definitely going through a boom in pricing that’s making it feel pretty close to US cities … was way way better a decade ago from what I’ve heard.
We never planned to come here, but that's where we found good new positions, so... Our savings schedule took quite a hit. We were supposed to move to NRW too, prices were significantly better.
What rent caps and hyper strict zoning laws can do to a city. Although I’ve heard that Germany is easing up on rent caps for new developments is that true?
I am unsure about it, but our rent is around 23 euros per square meter. We tried really hard to find something else, but the competition is fierce. As foreigners it isn't particularly simple as you rely on your registration to be able to continue to interact the immigration authorities.
You are comparing a random "City" with 120k inhabitants to literally the most expensive City in Germany (with over 10x its size).
Compare it to Wolfsburg, Heilbronn, Würzburg, etc which are comparable in size and you are about half that rent...
Still a better comparison for the rent situation USA vs. Germany would be Munich (highest rent, best job opportunities, good infrastructure and big) to something like San Francisco.
And i am pretty sure, that rent in Munich is much cheaper.
Nice, right? When I was searching for an apartment the price per square meter was quite stable, regardless of size. The only places that were cheaper were significantly older buildings, where you probably spend more for heating.
Before moving here I paid roughly 6 euros per square meter, so you can imagine how happy I was with the change. Unfortunately it wasn't possible to continue in the same job and the offer here was just too good to pass. We try to think of it as an investment in our careers (':
As much as I've been enjoying the city I wouldn't mind moving to another region if there's a good opportunity.
Including property tax and insurance my house is costing me $0.91/ft2, or 8.41 euros/m2. This is a 15 year mortgage so that's elevated about 10 cents compare to a 30 year .
I'd have to foreclose if that tripled, which is roughly what the next owner will have to pay because my home value has tripled since I bought it.
Ann Arbor, at the time I bought, was averaging about $1.07/ft2. The people over at r/FIRE love to downplay the value of owning a home, but holy shit am I saving a lot of money by doing so. Plus the nearly $300k of equity in 13 years.
Is buying a home an option for you and your partner? Maybe after your next career hop?
Edit omg. Zillow lists possible rent for my home at about $1000 more than my mortgage+insurance+taxes. I should go live in a tent and rent it out
I’d be curious if that’s per apartment (studio, 1br apartment etc) or per square meter. Apartments here are definitely smaller. Which is partially an older building / cultural thing, and partially a greedy landlord thing (naturally).
You could be right though, it’s definitely closer than the other elements on my list.
The main thing i've noticed is the avg expat tends to be paid very well usually and are not typically interacting with the working class joe of Germany.
Yes but you pay less for healthcare, transport (unless you’re rural), get more free time and even paid free time mandated by law. You might be paying higher rents relative to wage but you gain so much more.
Overall quality of life is better in Germany but if we are comparing income specifically then the US has a much higher median disposable income(PPP and work hour adjusted)
I'd speculate the average quality of life is better in Germany while the US has higher peaks and lower valleys. An engineer in the US has a better quality of life than an engineer in Germany. A store clerk in Germany would have a better quality of life than a store clerk in the US
Interesting. I only know a study from my home country Sweden. They said if you live in Stockholm (the most expensive town) you get about 10 square meters for a third of your salary (which is the upper limit of an acceptable rent). The cheapest town gave you 520 sqm for a third of your salary.
And as we all know, any minute spent commuting is so dehumanizing that your life is useless. Or something like that.
Anyways.
What are the rental percentages where you are from?
You can't really compare renting in North America to that in most of western Europe in terms of "size". Since we don't face the same geographic limitations most places have fairly large units (exclude the super dense cities like New York, and even then they have large units they're just so expensive). Comparing them at all is challenging for this and an array of other reasons.
I'm honestly not sure what the heck you're trying to say. I'm commenting that you can't compare price per sqm in Western Europe vs North America. You're now talking about just cost, north as a location, and loansharking?
North America is not cheap compared to Denmark or Germany (see the other comments here, or just google it). Sweden is tiny, land is absolutely a problem in terms of comparing to NA.
Germany is 1/3 the size of our most populated Province. Even the largest western European countries cannot be compared to North America for housing size. The rules of comparative analysis require there is enough "like" traits to warrant comparison. There is not.
Lived in Berlin, NYC, Boston, Buffalo, Stockholm. Even buffalo took more of my income by percentage than Berlin though Berlin was just over a decade ago and buffalo a little bit longer ago.
Even in the absence of formal “rent controls” as Americans know it, rents are way more stable in Germany. It’s completely typical for someone to live in a rental for decades and to be paying a fraction of the current market value. That’s the norm, not something special that you “manage”
And while many places do have a housing crisis, “multi year wait” for a new apartment is absolute nonsense
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u/moderngamer327 6d ago
As far as I’m aware unless you manage to get into a rent controlled apartment which can be up to a multi year wait in some places, Germany has higher rent than the US(relative to wages)