Buy or rent? How to save in your region!

Buy or rent? How to save in your region!

According to the “Postbank Wohnatlas 2025” study by the Hamburg World Economic Institute (HWWI), the real estate market in Germany moved a lot in 2024. While purchase prices for residential properties fell by a modest 0.7% compared to the previous year, net rents increased by a whopping 5.1%. This brings a breath of fresh air to the market, as the average income burden for buyers has fallen slightly: it is now 18.3% of net household income, which marks a decrease of 0.9 percentage points compared to the previous year. On the other hand, however, tenants had to spend a higher proportion of 14.1% of their income on net rent, which also represents an increase (Postbank).

A closer look at the regions reveals interesting differences. According to the study, around 23% of German households live in very cheap purchasing regions where less than 15% of their income is needed to finance loans. Conversely, 25% are found in regions with high purchase prices that take up at least 25% of income. This is a decrease from 69 to 56 municipalities compared to the previous year.

Where prices rise and fall

But where is it particularly worth buying now? The large metropolises and holiday areas are still very popular when it comes to costs. In the Nordfriesland district, buyers even have to spend 53.4% ​​of their income on financing. A similar picture can also be seen in the districts of Aurich (44.4%), Miesbach (39.6%) and Garmisch-Partenkirchen (38.3%). Cities such as Munich (43.6%), Berlin (43.3%), Hamburg (39.8%) and Frankfurt am Main (38.3%) are also among the most expensive regions, while the rule of thumb is that households should not spend more than 30% of their income on housing (Postbank).

At the same time, globalization and the changing age structure played a role in price developments. In large cities, especially in the centers, the prices per square meter for purchase and rental properties continue to rise. In Hamburg, the prices per square meter have risen by around eight percent compared to the previous year, and since 2013 these prices for all property types have increased by a total of 22 percent (Homeday).

The latest trends and developments

Current developments raise the question: Is renting really more expensive than buying? While purchase prices are on a slight downward trend, rental prices are clearly increasing. This could lead to a change in thinking among many potential buyers. Buyers should not only keep an eye on current prices, but also consider the long-term viability of their financing and the necessary financial flexibility for unexpected expenses. This pays off particularly in challenging markets (BBSR).

In conclusion, it should be noted that the real estate market is still in flux and presents numerous regional differences that are important for buyers and tenants. The right decisions when it comes to financing and a good hand in finding the right property are crucial to getting a good deal in today's world.