Home Purchase Affordability in Europe

How expensive is it to buy a home compared to local salaries?

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How expensive is it to buy real estate around Europe? I could give you the average price of an average home in each European city, but that wouldn’t be totally fair. Salaries are not the same throughout Europe. Numbeo’s Property Price Index, gives you a much more realistic view of the affordability of real estate in each city. The index looks at how many annual median family salaries (1.5 full-time salary) it takes to purchase a median sized apartment. So, if you live in Oslo and you are able to save 100% of your disposable income (which of course is rarely the case as we still need to pay the rent, pay for food etc.) it would take you 10.5 years until you have saved enough to buy a median sized apartment without a mortgage. Of course, almost no one does that, as it is much better to just take a mortgage, but you get the point. The Price to Income Ratio of the Property Price Index shows us how expensive real estate in a city is, measured in years of a local family salary.

The first thing we notice, is that real estate in a lot of Europe’s major cities is quite expensive compared to the local income. That’s not too surprising as major cities (especially the capital or largest city in the country) are always more expensive than other cities in the country.

Overall, it seems like real estate is more expensive in Eastern Europe than anywhere else in Europe. Moscow is the most expensive city in Europe, where you need 21.6 annual median family salaries to afford a median sized apartment. Cascais and Paris are just behind Moscow. The rest of the top 10 (except Lisbon) are all Eastern European cities. Croatia and Poland have quite a number of expensive cities. It seems like real estate is not very affordable in almost every major city in Croatia and Poland.

The more affordable real estate can be found in parts of the Netherlands, Belgium, Ireland, Germany and Denmark. The most affordable city on this map is Limerick, where a median sized apartment costs only 4.3 median annual family salaries. In second place is another Irish city, Cork (5.6). The Hague is in 3rd place (5.7). Nicosia in fourth place, is the cheapest European capital, where it takes 5.8 median annual local family salaries.