The Shifting Landscape of Affordable Housing in Baden-Württemberg
Germany faces a growing challenge in finding affordable housing, but within Baden-Württemberg, certain mid-sized cities are offering a glimmer of hope. A recent analysis reveals pockets of relative affordability, presenting opportunities for residents and potential movers.
Where are the most affordable cities?
The search for reasonably priced accommodation is becoming increasingly difficult across Germany. However, cities like Schwäbisch Gmünd and Villingen-Schwenningen stand out as having a comparatively large supply of rental properties. More than 67% of available apartments in these cities, with populations exceeding 50,000, were listed at under €12 per square meter in the second half of 2025, according to research from the IVD Marktforschungsinstitut.
Other cities offering a higher proportion of affordable rentals include Rastatt (57.6%), Göppingen (55.4%), Offenburg (48.6%), Aalen (47.1%), and Baden-Baden (46.1%).
The Impact of Location and Commuting
Interestingly, cities with strong transport links to Stuttgart, the state capital, tend to have a lower percentage of affordable housing. Tübingen (11%), Böblingen (12.1%), Sindelfingen (12.8%), Ludwigsburg (14.2%), and Waiblingen (20.7%) all show significantly lower availability of rentals under the €12/sqm threshold.
This suggests that proximity to major employment centers drives up demand and, rental prices.
Rising Rents: A Nationwide Trend
The overall trend in Germany points to increasing rental costs. Nationally, rents rose by an average of 4.5% in 2025 compared to the previous year. The average cold rent across Germany reached €14.41 per square meter. Munich remains the most expensive city, with an average of €23.35 per square meter, whereas Leipzig offers the most affordable rates at €10.22 per square meter. Stuttgart ranks third among major cities, with an average cold rent of €16.11.
Long-Term Rental Price Increases
Looking at the past decade, rental prices have consistently increased across Baden-Württemberg. Konstanz has seen the most significant rise, with rents increasing by 60% over ten years. Stuttgart has experienced a 31% increase, while Böblingen has seen a 48% jump. Other cities like Ulm, Tübingen, Reutlingen, Göppingen, and Schwäbisch Gmünd have also experienced substantial increases, ranging from 31% to 58%.
The Housing Shortage: A Growing Crisis
Germany is currently facing a housing shortage of 1.4 million units, with Baden-Württemberg accounting for nearly 200,000 of those. This shortage is particularly impacting young people and those with lower incomes, making it increasingly difficult to locate affordable housing.
The lack of new construction, coupled with changing household structures (a rise in single-person households), is exacerbating the problem. Experts suggest that 350,000 to 400,000 new homes are needed annually to meet demand.
The Role of Land Prices
High land prices in Baden-Württemberg, often exceeding €1000 per square meter, are hindering the development of affordable housing. The state’s reliance on market-driven solutions has contributed to the crisis, with insufficient government intervention to promote affordable housing construction.
Decreasing Rental Listings
The number of rental listings decreased noticeably in the fourth quarter, falling by more than 10% compared to the previous quarter and by 7% compared to the fourth quarter of 2024. More than 17% of all listings in the fourth quarter were for temporary contracts and furnished apartments – a record high, according to the IfW.
Frequently Asked Questions
- Which cities in Baden-Württemberg offer the most affordable housing?
- Schwäbisch Gmünd and Villingen-Schwenningen currently have the highest proportion of rentals under €12 per square meter.
- Why are rents rising in Germany?
- A shortage of housing, increased demand, and rising construction costs are all contributing to the increase in rental prices.
- What is being done to address the housing shortage?
- Experts suggest increased government intervention, promoting affordable housing construction, and addressing high land prices are crucial steps.
This article originally appeared on SWP.
