It’s harder than ever to get your foot on the first rung of the property ladder, not just with the cost of the property itself, but also additional expenses such as bills and home & contents insurance. But how does the affordability of property compare around the world?
Earnings and property prices vary a lot from one country to the next, so to find out the answer to our question, we looked at average property prices per square metre and average disposable household income. We then used this to calculate the cost per square metre (m2) as a percentage of disposable income and determine which countries are the most and least affordable to buy in.
The most affordable of the nations that we looked at was Turkey, which had the lowest price per square metre (US$736.12). With an average household disposable income of US$18,302, that means an affordability ratio of just 4%.
Despite having a much higher property price at US$2,845.82 per square metre, the USA was the second most affordable country, as it has a higher average disposable income (US$45,284). This made for an affordability ratio of 6.3%.
In third place is Mexico, with an affordability ratio of 7.1%. While the average disposable income in Mexico is fairly low (US$13,965), it also has some of the cheapest property at an average cost of US$984.63 per square metre.
On the other hand, the country where you’d struggle the most to buy a property is South Korea. South Korea is already known for its high cost of living, with an average property price of US$12,989.34 per square metre. Such a high living cost, combined with an average household disposable income of US$21,882, means South Korea’s affordability ratio is the largest on our list at 59.4%.
Following this was Israel, where the average household disposable income was slightly higher (US$24,863). However, property prices were a bit lower too (US$7,598.98), which resulted in an affordability ratio of 30.6%.
Luxembourg is another nation known for being amongst the most expensive in the world, a reputation influenced by its high property cost of $11,354.86 per square metre. Whilst earnings here are naturally higher too, it still leaves Luxembourg as one of the least affordable nations.
Key: Property price per m2 to income %0%-12.99% 13%-25.99% 26%-38.99%39%+
We calculated the property price to income affordability ratio by dividing the average property price per square metre by the average disposable household income.
Average Property Price per Square Metre
Sourced from Numbeo (taking an average of the figures for properties in and outside city centres), correct as of 17/01/22.
Average disposable household income
Sourced from the OECD’s Better Life Index, which gives the average net adjusted amount that a household earns per year, after taxes, correct as of 17/01/22.
All currency figures were converted from US dollars to Euros as of 17/01/22.