German rents aren't the real problem

A closer look at the data reveals something surprising about German housing costs

The notion that rising rents are the great social problem facing Germany today has become so cemented in the public consciousness that it is no longer even questioned. 

After the Constitutional Court overturned Berlin’s rental cap last week thousands of people took to the capital’s streets to demand an end to the Mietenwahnsinn. Meanwhile political commentators demanded that the federal government now act to halt spiralling rents.

The claim that rents have gone up by up to 50 percent in some cities is repeated like a mantra throughout the national press.

Look a little closer at the data though and you see a rather different story. 

Germany’s problem is not out-of-control living costs - in fact they’ve stayed boringly stable over the past decade - the real problem is a shortage of housing in the big cities.

Data published by Destatis, the national statistics agency, shows that housing costs as a percentage of household income have actually dropped steadily over the past decade.

This decrease…