DIP partner Aengevelt Immobilien has investigated the correlation between residential rent levels and subjective life satisfaction in 40 major German cities in a recent study. The analysis revealed that only 0.6% of the variance in life satisfaction can be explained by differences in rent levels. This suggests a marginal to non-existent relationship.
The study used data on subjective life satisfaction from the SKL City Ranking, where satisfaction was measured on a scale from 0 ('not at all satisfied') to 10 ('completely satisfied'). The average satisfaction varied from 5.80 (Rostock) to 7.74 (Erfurt). This data was correlated with average rents for existing properties of medium residential value from the IVD Housing Price Index. The calculated correlation coefficient of -0.08 confirms the absence of a noteworthy statistical relationship.
Attractiveness as a Price Driver
The study suggests that high rent price levels are more an indicator of a city's attractiveness. Cities that offer well-developed infrastructure, excellent educational opportunities, and positive employment prospects attract many new residents. This increased demand leads to a rise in rent prices, which, however, apparently does not negatively affect the life satisfaction of residents.
Concrete examples illustrate this finding: Düsseldorf has one of the highest average rents at 11.50 EUR/m² and simultaneously ranks third in the satisfaction index with 7.41. In contrast, Wiesbaden, with a comparable average rent of 11.25 EUR/m², ranks second to last in satisfaction with a value of 6.50. Munich and Stuttgart, the cities with the highest average rents of 17.80 EUR/m² and 14.80 EUR/m² respectively, rank in the middle of the satisfaction scale (places 24 and 21). Hamburg, the fourth most expensive city at 12.90 EUR/m², achieves a spot in the upper third with a happiness index of 7.20.
The situation in Gelsenkirchen, the city with the lowest average rent level (6.00 EUR/m²), also illustrates the lack of correlation: here, life satisfaction stands at 6.81, placing it seventh from last. This supports the conclusion that neither high rents diminish satisfaction nor low rents increase it.
Factors of Life Satisfaction in Düsseldorf
Düsseldorf, as the happiest city with over 500,000 inhabitants in the ranking, highlights factors that promote high life satisfaction. The disposable income per inhabitant there is 29,832 EUR, which is 23% above the average of the other cities surveyed. This correlates with an above-average ability to pay rent. Additionally, Düsseldorf scores highly with a good educational landscape, evidenced by a school dropout rate of 4.4% compared to 7.8% in the urban average. The low proportion of dissatisfied individuals (4.1% compared to 8.6% in the urban average) and a majority of highly satisfied individuals are remarkable, even given a high proportion of single households, which could tend to lower the happiness index.
Dr. Wulff Aengevelt, managing partner of Aengevelt Immobilien, comments that life satisfaction depends on complex factors such as educational opportunities, job offers, and income prospects. He believes that the relevance of rent price levels should be viewed in a nuanced way and in the context of a regional mix of opportunities. Demand influences the price of goods, and this also applies to real estate. He emphasises that a political focus on rent levels and rent caps does not correspond to the actual preferences of people, who primarily want to live in attractive cities and regions and are willing to accept the resulting price levels.
