The cost of living in Munich continues to be the highest in Germany, according to the latest Regional Price Index for 2024 published by the Institute of the German Economy (IW). Last year, housing and living expenses in the Bavarian capital were 23 percent above the national average, with housing costs being the main contributor.
Across Germany’s seven largest cities, Munich, Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, and Stuttgart, housing costs averaged nearly 50 percent above the national level, while additional utility costs were 22 percent higher, the IW reported. Overall, living costs in these cities were 11 percent above the countrywide average.
In contrast, rural areas, where population decline is common, have rents and utility costs up to one-third below the national average. The most affordable regions include sparsely populated areas such as Vogtlandkreis in Saxony. Regardless of urban or rural location, the exceptionally high inflation between 2022 and 2024 has impacted all regions, IW expert Ralph Henger noted. He added that the regional price gap has remained largely unchanged despite significant price increases.
Henger emphasized that a city’s affordability depends largely on housing costs, which also presents an opportunity: “If municipalities succeed in accelerating housing construction, they can make life in their cities generally more affordable.”
The IW compiles the Regional Price Index together with the Federal Institute for Research on Building, Urban Affairs, and Spatial Development. The index compares housing and living costs, including rent, electricity, gas, and food, across all 400 districts and independent cities in Germany. It is based on automated data analyses from publicly accessible online portals, ranging from Rewe to Verivox.
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