Overview
- An IW/Interhyp analysis finds model higher‑income households needed about 29% of net income to finance a flat in October 2025, corresponding to an index reading of 128 that remains well below 2015 levels.
- Affordability diverges sharply by region, with many rural areas around 26% burdens while large metros remain far tougher; Düsseldorf and Stuttgart are comparatively easier than Berlin, Hamburg, Cologne and Frankfurt.
- Munich is the least affordable major city at roughly a 43% income burden for the model household, with tourist hotspots such as Nordfriesland also ranking as highly expensive.
- IW and Interhyp urge policy steps including lower real‑estate transfer tax, streamlined planning and approvals, and targeted low‑interest subordinate loans, citing Schleswig‑Holstein’s program as a working example.
- IW’s Michael Voigtländer forecasts a moderate 3–4% rise in property prices and rents in 2026 given firm demand and constrained supply.