The words “affordable” and “Munich” don’t usually come in the same sentence. Munich is known as the most expensive city in Germany, and often on the list of most expensive cities in the world. But let’s take a look at some details:
For starters, Germany has the lowest unemployment rate of any member of the European Union. Better yet, Munich has the lowest unemployment rate in Germany, boasting 2.6% (source: Eurostat, the European Union statistics office). Other major German cities, such as Berlin, unemployment rates as high as 10.9%.
This foundation gives folks in Munich a much better shot at finding a job, and therefore having income to afford Munich in the first place. This employment rate foundation is actually even better than the United States, which has an unemployment rate of 6.1%.
There is comfort with large companies headquartered in Munich as well. BMW, MTU Aero Engines, Siemens and Allianz are all headquartered in Germany, as is Augustiner Brau, which brews the areas most popular beer. Amazon, Google, Merck, and Kraft also have subsidiary offices in Munich.
For more of a comfort level, it is good to know that, in expat-speak, Munich is ranked as a “low hardship” location. This means that new residents from the United States, for example, won’t experience much culture shock in terms of political, education, or city infrastructure differences in Munich. From this standpoint, Munich is more “affordable” than other global cities that may require a bigger lifestyle adjustment.
So, now let’s look at major expenditures of housing, transporation, and health care:
First, housing is going to be expensive, but not out of reach. A smaller one-room apartment in Munich can be gained for about $9,000 U.S. per year, and a larger four room apartment will be around $23,000 U.S. per year. For comparison, the average U.S. housing spend is $17,000 U.S per year. So, depending on how much space you need, Munich housing may be affordable enough.
Second: transportation. It costs about $9,000 U.S. per year to own one car in the United States. This includes the car payment, insurance, and gas. With most families owning two cars, that’s a transportation expense of $18,000 per year. In contrast, Munich offers an extensive public transport system, for which you can get a pass for about $750 U.S. per year, or $1,500 U.S. per year for two people. That’s a huge savings. This makes up for the higher housing costs in Munich.
Third is health care. For a baseline, U.S. persons spend an average of $3,600 U.S. per year on health care. In Munich, it’s going to be more. It will be either A) $5,200 for public healthcare, if you make less than $65,000 U.S. per year, or B) higher than that for private healthcare, where the premium will depend on your risk.
When weighing housing, transportation, and healthcare together, you’ll see that Munich becomes more competitive against the U.S. average. Of course, this all depends on your personal situation and family, and standard of living. Just don’t rule out Munich without some research. It may be more affordable than you think.