Expensive living continues in the Rhine-Main region, with high prices for residential properties persisting. - Real Estate Market Remains Expensive in Rhine-Main Area
In a recent study by the Institute of German Economics (IW) and mortgage lender Interhyp, it was revealed that Hesse and the Rhine-Main region, home to the financial hub of Frankfurt, face challenges in terms of housing affordability. The study, obtained by the German Press Agency, analysed 400 counties and cities nationwide.
Real estate affordability is typically measured by considering factors such as housing prices, income levels, and the general cost of living. Hesse, known for its central location and proximity to major financial institutions, has higher housing prices in cities like Frankfurt, making it less affordable compared to many other German states. The Rhine-Main region, which includes cities like Frankfurt, Wiesbaden, and Mainz, offers excellent infrastructure and job opportunities, contributing to a higher cost of living.
Compared to other states, Bavaria, particularly around Munich, faces similar affordability challenges. North Rhine-Westphalia, as the most populous state, has a diverse range of housing markets, with cities like Cologne and Düsseldorf being more expensive, while smaller towns may offer better affordability. Baden-Württemberg, known for its high standard of living, also offers more affordable options in smaller towns.
Eastern German states like Saxony and Brandenburg often have lower housing costs, making them more affordable for homebuyers. The study found that in the seven largest cities in Germany, including Frankfurt, the index remains below the affordability threshold.
The affordability index compares the monthly mortgage payment to the net income of a model household in the respective region. In Hesse, the index value for home ownership is 98, falling below the affordability threshold of 100 points. Among the cities in Hesse, Kassel has an index of 116, Darmstadt has 94, Offenbach has 77, and Wiesbaden has 75. The most favorable situation for buyers is in the Saarland with a value of 151, in Saxony-Anhalt (139) and in Thuringia (131), which is well above the national average of around 100.
At the other end of the scale, Bavaria, Berlin, and Hamburg still have lower affordability index values compared to the rest of Germany. The Waldeck-Frankenberg district, the Vogelsberg district, and the Hersfeld-Rotenburg district in Hesse follow with index values of 153. The Werra-Meißner district in Hesse has the most affordable single and two-family homes with an index of 157.
In conclusion, while Hesse and the Rhine-Main region offer excellent economic opportunities, they face challenges in terms of housing affordability due to high demand and limited supply, which drives up prices. Other German states, especially those in the eastern regions, may offer more affordable options for homebuyers. To get precise data, it would be beneficial to consult recent real estate reports or studies that provide detailed affordability indexes for these regions.
- In the realm of personal-finance, investors might find vocational training in careers like real-estate or finance particularly lucrative, considering the ongoing challenges in the housing-market and the continuous need for financial services in regions like Hesse and the Rhine-Main area.
- For those seeking affordable housing in EC countries, states like the Eastern German states of Saxony and Brandenburg might be worth exploring, as they have lower housing costs compared to other regions.
- With the affordability index value for home ownership in Hesse falling below the affordability threshold of 100 points, it's crucial for potential homebuyers in the region to carefully consider their financing options and make informed decisions by researching the local housing-market and real-estate trends.
