Where are the cheapest and most expensive places to live in Germany?

Depending where you live in Germany, the cost of living can vary a lot.

The trend is clear: living in or around a big city or in the former west is more expensive, while rural and eastern regions are cheaper - with the notable exception of Berlin.

And almost all of these price differences are based on housing. Widespread discounters like Aldi mean that the differences between other costs are pretty minimal.

What are the latest stats on the cost of living?

A new price index by the Institute for the Economy (IW) has charted the places where living costs are highest and lowest in Germany - and the results show huge regional differences.

In terms of rents, the IW found a 38 percent price difference per square metre between the most expensive cities and the cheapest districts. This is much more than the differences in other living expenses such as ingredients and electricity, which vary as little as 6 percent across the country.

READ ALSO: REVEALED: How the cost of renting in Germany compares to home ownership

“It is clear that the costs of housing shape regional prices,” the study's authors Markus Eltges and Michael Hüther summarise. “This results in far-reaching disparities - from the big cities with their expensive housing markets to the peripheral regions. The prices for the remaining goods and services vary very little across the country.”

Regional Price Index Germany

But where is the cheapest and the most expensive?

Perhaps unsurprisingly, the most expensive city in Germany is Munich, the capital of Bavaria. Living there will cost you a solid 25 percent above average, while living in the suburbs nearly 17 percent.

This is followed by Germany’s financial hub Frankfurt am Main, where rental costs are nearly 16 percent higher than average.

Stuttgart in Baden-Württemberg - where many of the famed car manufacturers are based - costs just under 15 percent more.

And where does that leave Berlin? The so-called “poor but sexy” capital is now above the average cost of living in Germany, but still cheaper compared to other large German cities, coming in at 40^th place in Germany. In fact, the big cities statistically drag up the average house prices in the country as a whole.

And where are the cheapest places in Germany? The areas of Vogtlandkreis, Greiz, and Görlitz, in Saxony are some of the places where your money goes furthest, with housing costing almost a third less than the average, alongside Salzlandkreis in Saxony-Anhalt and the cheapest part of west Germany Pirmasens in Rhineland-Palatinate.

Of course, costs aren’t the only variable when it comes to how much money you have in your Konto. The study doesn’t take salary and income into account - and this is big one, since how much people earn in different places varies massively too. Munich and Hamburg are some of the richest parts of the country, so people there can afford more.

That said, more than one in seven people in Germany are spending over 40 percent of their salary on rent.

READ MORE: Over a million German households spend half of their income on rent

Nevertheless, there is some good news, the study’s authors say.

"Life must remain affordable, no matter where in Germany,” says IW study author Christoph Schröder. “The state covers the housing costs for those in need, which relieves the burden in the right places and leads to a strong regionalisation of housing benefits.”