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IW/BBSR Index: Germany’s Urban–Rural Cost Gap Persists, Frankfurt Near the Top

Housing costs drive the divide, with rents in the largest cities far above the national average.

Overview

  • The seven largest cities posted overall living costs about 11% above the national average in 2024, reinforcing a stable regional pattern.
  • Frankfurt’s price level is 14.6% above the German mean, ranking 398 of 400 districts, with only Munich city and Landkreis München higher.
  • Housing is the primary driver of the gap, with total housing costs in big cities about 37% higher and advertised rents nearly 48% above the national average.
  • Within North Rhine-Westphalia, Münster (+5.7%) and Bonn (+6.5%) sit above average, while Landkreis Höxter is roughly 8% below.
  • Despite sharp increases in energy and food since 2022, the spatial differences remained largely unchanged, and IW researchers expect further rent pressure in tight urban markets.