BestBrokers.com carried out a study analysing how many average monthly salaries are needed to buy a 100 m2 apartment in different European countries.
The results show that Denmark is the cheapest country in the EU to buy a property. It takes 114 average salaries to buy a 100 m2 apartment in this country. In second and third place are Ireland and Sweden with 123 and 129 salaries respectively.
In Cyprus, which unexpectedly came fourth, it costs 139 salaries to buy a home. At the same time, the agency estimates the average annual income of the inhabitants of the island state in
21,000 and the cost of 1 m2 of property - in 2,584 euros.
The top ten countries with the most affordable housing in relation to the average salary were also included:
- Luxembourg (residents need 246 salaries to buy a 100 m2 apartment);
- Malta (232 salaries);
- Greece (228 salaries);
- France (197 salaries);
- Finland (186 salaries);
- Germany (185 salaries).
On the other hand, the Czech Republic and Slovakia were the least accessible countries for buying a home. The average citizen in these countries will need around 50 years to save up for a home. Interestingly, the ranking of countries with the most unaffordable housing due to high inflation (55% per year) is headed by Turkey, where the average annual salary of $6.5 thousand is reduced to $2,965 when inflation is taken into account. In 2024, the ratio of housing costs to the income of residents in Turkey will be 81.45%, while in Cyprus this indicator will be 11.83%.
It is worth noting that one of the most important elements of BestBrokers.com's analysis of house prices and affordability was the number of mortgages in each country.
The study used data on mortgage interest rates and projected inflation rates for the third quarter of 2024 to find the 'real' interest rates (a measure of the interest rate that takes inflation into account) on mortgages for the third quarter of 2024 in different countries.
The real mortgage rate reflects the real cost of funds to the borrower and the real profit to the lender," the report says.
According to this calculation, European countries with high real mortgage rates include Latvia (6.65 per cent) and Poland (5.1 per cent). Germany has a rate of 1.85 per cent and the UK 1.77 per cent.
The next highest European economies have rates around %, such as France (1.13%), Italy (0.99%) and the Netherlands (0.96%). In the middle of the list, but with relatively low real mortgage rates, are Luxembourg (1.78%), the UK (1.77%), Greece (1.62%), Denmark (1.55%) and Portugal (1.50%). Cyprus has an inflation-adjusted rate of 1.90 per cent, according to the BestBrokers.com report, while the lowest rates are found in Malta at -0.44 per cent, Belgium at 0.52 per cent and Sweden at -1.21 per cent.