Munich is the most expensive German city (picture: Matthias Schröder, Unsplash)
Living in the city has always been more expensive – but what has happened on the German rental market in recent years is now blown up.
Rents that used to be luxury are now everyday life in many metropolises.
The statistics clearly show that if you want to live in Munich, Frankfurt or Berlin, you either need a very good income – or strong nerves. Because the numbers speak for themselves – and against everyone who has to make ends meet with an average wage.
Ranking: The most expensive cities in Germany after rent
Most expensive city in Germany: Munich remains the leader
In terms of rent, Munich will again lead the ranking at a clear distance in 2025.
The average rent in the new building segment is a proud 22.08 euros per square meter – in some layers even over 25 euros. This means that the living space in Munich costs around twice as much as in the Bavarian average, which is 10.20 euros. It gets particularly blatant for students: a shared apartment room has an average of around 800 euros-a sum that is simply not to be lifted for many.
Why is Munich so expensive?
The reasons all interlock – a mix of economic power, investor hype and political paralysis.
What drives the Munich rental madness:
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Hike and purchasing power: 30,000 new residents per year, many with high incomes – over 38 % of households earn more than 5,000 euros a month.
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Capital system instead of residential purposes: 23 % of real estate includes foreign investors who often place new buildings directly in the luxury segment (30 €/m² and more).
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Baustau instead of construction boom: Despite billions in social housing, it is stuck in permits (42 months on average) and construction costs (material prices +34 % since 2021).
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Pure gentrification: Refurbished old building districts such as the Glockenbach explode in terms of price – tenants with low incomes are increasingly disappearing from the interior districts.
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Reality check: Studies pay an average of 800 euros for a shared apartment. Even if you earn 4,000 euros net, you have a competition when looking for an apartment – partly 80 applicants on an apartment.
And although the city tries measures, many of them remain ineffective:
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Rental price brake? Do not reach – In 2024, three quarters of the new rentals are still above the permissible border.
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Infrastructure groans -480,000 commuters, daycare bottleneck, CO₂ balance sheet deteriorated daily because more and more flee to the surrounding area.
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Social gap grows – More and more normal earners are being displaced, the living space in the city becomes a luxury goods.
There are model projects such as modular wooden buildings, tiny houses or building cooperatives-all well and good. But without real soil reform and political control, the drop stays on the hot stone. If something does not change soon, Munich will finally become the city of those who can afford it – and for everyone else to the pure passage station.
Frankfurt am Main: The price of the banking metropolis
Frankfurt has caught up – with an average of 19.17 euros per square meter, the banking city ends up in second place. If you want to live here in the center, for example in the old town or Bockenheim, you quickly pay even more. For a shared apartment, an average of 665 euros are due here-for students and young professionals, no small things.
It is no coincidence that rents here are so high. Frankfurt is internationally set up, with a large financial industry, many corporations and a correspondingly high purchasing power. In addition, the living space is also scarce here – and that drives up the prices.
Berlin: The capital becomes expensive
A few years ago, Berlin was considered cheap – that is long gone. In 2025, the average square meter price is 18.18 euros.
Middle and Charlottenburg are particularly expensive, where 20 euros and more have to be paid easily.
Berlin grows – and the prices increase with growth. The search for an apartment is difficult, especially for young people or families. A shared apartment costs an average of 650 euros. The problem: the demand is enormous, the new building hardly comes after, and the market is overheated. If you want to afford something permanently, you have to dig deep into your pocket – or pull out at some point.
Freiburg, Stuttgart and Hamburg are also no bargains
Freiburg follows in fourth place with 17.04 euros per square meter – a city that has long been considered an insider tip, but has now increased vigorously because of the high quality of life and unist location. Immediately behind, Stuttgart is 17.03 euros, although in districts such as Stuttgart-Nord, even over 21 euros.
Hamburg lands in 6th place with 16.61 euros. The locations on the Alster or in Eimsbüttel with over 22 euros/m² are particularly expensive. Prices continue to rise in Hamburg – 10 percent last year alone.
What drives the prices upwards?
The main cause: too little is being built – and if so, then too expensive. In metropolises such as Munich or Hamburg, space is scarce, the property prices are high, approval processes lengthy, and the construction costs increase. At the same time, the population grows – Hamburg alone increased by 60,000 inhabitants in two years. Result: More demand than supply – and this inevitably leads to higher rents.
There are also economic factors. Those who work in a city like Munich often earn above average – and can afford higher rents. This, in turn, attracts other high earners, drives the prices and slowly pushes normal earners out of the market.
And what do the rising rents mean for people?
Quite simply: it will be tight – and expensive. Students now pay more for a shared apartment than before for a small apartment.
800 euros in Munich, 665 in Frankfurt, 650 in Berlin. These amounts are no longer feasible for many – despite BAföG or part -time job.
It also becomes critical for normal employees. As soon as the rent is more than 30 percent of the income, one speaks of a so -called rental load limit. This has long been exceeded in many cities. For a single household in Munich, for example, the monthly expenses including rent amount to 2,371 euros.
A family of four must expect up to 5,905 euros. Even with a net income of over 2,100 euros, there is often not much left.
The consequence: displacement from the city centers
If you can no longer afford it, pull out – into the surrounding area. Commuting becomes a new normality, with all known problems: overloaded roads, crowded trains, more stress, more costs.
There is a clear shift within the cities: high -income households in the central locations, everyone else further outside. The social mix is lost, the cities are becoming more homogeneous – and that is not a good development.
What has to change in Germany?
Building, building, building – sounds simple, but is complex.
More densification, faster building permit process, more social housing – all of this would be urgently needed. The surrounding area also has to be better connected so that commuting does not become a burden, but becomes a real option. And new living concepts are needed, from Tiny Houses to Community Housing Projects.
Conclusion: living becomes a social question
The rental prices in Germany continue to rise – and with them the challenges.
Housing becomes luxury, especially in metropolises. Munich remains at the top, followed by Frankfurt, Berlin, Freiburg, Stuttgart and Hamburg. Students, families and normal earners are increasingly under pressure. Without political measures there is a risk of displacement on a broad front. The question is no longer whether you can afford a nice home – but whether you can still live in the city.
And all of us are concerned.