Working from Home Attracts People from Big Cities to the Suburbs in Germany

Working from home has motivated many people to relocate, especially former city dwellers. This is the result of a survey of 12,000 people in Germany conducted by the ifo Institute and the real-estate portal immowelt. “Among those who left the big city behind, 38 percent moved to the suburbs, while 30 percent moved to smaller cities with between 100,000 and 500,000 residents. Only 9 percent of former big-city residents moved to a small town, and 5 percent to rural areas,” says Mathias Dolls, Deputy Director of the ifo Center for Macroeconomics and Surveys.

When asked about plans for the next 12 months, 10 percent of city dwellers say they are planning a major relocation. Of these, 40 percent are moving to a smaller city and 22 percent to the suburbs. Small towns and rural areas are the least frequently mentioned destinations for relocation (8 and 12 percent, respectively). “Contrary to some expectations, the Covid-19 pandemic has not provoked an exodus to the countryside. Our survey results indicate that this isn’t likely to happen in the future either,” Dolls says.

Financial considerations are playing an increasingly significant role in the decision to relocate. “Respondents cite increased basic rents, excluding heating, and higher energy prices as major cost drivers,” Dolls says. In May 2021, 12 percent of respondents perceived housing costs to be a major financial burden. This percentage rose to 20 percent among those surveyed in the fall of 2022. Of those planning to move in the next 12 months, 12 percent cite the financial burden as the most important reason for moving. Before the energy crisis, financial considerations were less prominent.

The results are based on a representative survey of 12,000 people in Germany conducted in the fall of 2022 by the ifo Institute together with the real-estate portal immowelt. The study is an update of a previous survey conducted by the ifo Institute and immowelt in May 2021.