Munich
Munich has dropped six places to number 10 this year, reflecting widespread concerns that it is increasingly overpriced: ‘It has always had tight cap rates, particularly for offices, but the demand side and rental growth side today support that relative to other markets,’ said another investor who contributed to the report.
In popular German cities, rents are eating up the salaries of workers who live there. But for workers looking for the best salary-rent ratios, there are some surprising opportunities out there.
Predictably, rents in Munich, Berlin and Hamburg are taking a hefty chunk out of people’s salaries, according to analysis carried out this month by online job portal StepStone and property portal Immowelt.de.
Professionals in Munich can count on an average salary of €66,800. However, an apartment of between 80 sqm and 100 sqm will set them back around €1,500 – or 27% of their gross salary. Rents in Frankfurt are just behind those in Munich. While those in the banking sector can count on an average salary of around €67,700 – the highest average salary in Germany – 21% goes on rent. In Berlin, people are forking out around 24% of their gross salary in rent, which drops slightly to 22% in Hamburg, according to the study.
‘Life in trendy cities such as Berlin, Hamburg and Munich is sought-after but also very expensive,’ said Immowelt’s CEO Carsten Schlabritz. ‘Employers in medium-sized cities with cheap rents can leverage that to attract highly-qualified workers.’
Dortmund is the place to be for people keen to capitalize on the best salary-rent ratio in the country. Its 500,000 inhabitants only have to pay around €580 in rent per month on average, equating to a modest 12% of their salary. Essen is almost as cheap, with rents averaging €590 a month, or 13% of the average salary of €55,600.
‘Cities like Dortmund are still characterized by heavy industry,’ a spokesperson for Immowelt told REFIRE. ‘In addition, they suffer from comparatively high unemployment and are, therefore, less attractive to buyers despite lower prices. That’s why the salary-rent ratio is the best.’
Elsewhere, notably in Dresden and Stuttgart, the salary-rent ratio is also very attractive. Average salaries here are low – at just €20,000 – which is offset by inhabitants paying just 19% of their salary in rent.
However, StepStone’s CEO Dr. Sebastian Dettmers warns against only looking at the salary-rent ratio when job hunting. ‘If you can choose from several job opportunities, you should look at all the factors, including the cost of living but also whether you would feel comfortable at the firm in question and whether the job is a good fit.’
The study looked at 15,100 homes for rent via Immowelt.de in 14 of Germany’s biggest cities.It then factored in the most popular offers. Rental prices listed are without utilities (Nettokaltmieten). (ssk)
