The housing market keeps dragging its feet in the U.S.
Prices fell in January slightly, marking a full year of declines, according to Zillow (ZG), even though U.S. home values are still 6.2% higher than a year ago.
Housing affordability has fallen to a new low, thanks to higher mortgage rates and relatively high home prices. Just 38.1% of homes sold during the fourth quarter of 2022 were affordable to families earning a typical income.
Around most of the world, too, house prices outpaced incomes, according to 2021 data from the International Monetary Fund. In most countries, housing prices rose during the pandemic, but slowed through 2021.
How much does it cost to buy a home in other countries around the world? Is it more or less affordable? To find out, online lender NetCredit calculated the average home price in total and per square meter in 73 capital cities around the world and compared them to local incomes.
No. 1: Monaco
It’s little surprise that Monaco tops the list of most expensive real estate. The sovereign city-state on the Côte D’Azur is only 500 acres, with a population of about 38,400, making it the second-smallest and the most densely populated country in the world. The median home price there, according to NetCredit, is $4.475 million.
But Monaco is more affordable for its residents than Havana, Cuba, is for its residents. Havana has the lowest average home price of all 73 capital cities in the ranking, at $40,569— but the average-earning resident would need more than 91 years of annual salary to to buy a home. That’s more than any other city in the world except for Tehran, Iran, where it would take 158 years of salary to come up with Tehran’s median home price of $547,536, NetCredit found.
No. 2: Luxembourg
Luxembourg is about the size of the state of Rhode Island, with a population of about 640,000, and is the second most expensive capital city in the ranking. It’s one of the wealthiest countries in the world, and the median home price there is about $1.42 million.
To find the median home price in 73 capital cities around the world, NetCredit did a country-by-country analysis of property listings using a variety of real estate listing sites as well as property studies conducted within the last 12 months from local real estate companies in each country. They calculated the median home prices and prices per square meter for each city in the dataset, then gathered the average monthly net salary from numbeo.com and then calculated affordability to ascertain the number of years worked to earn a median home value.
Based on NetCredit’s research, here are the average home costs in 39 more countries, from highest to lowest, following Monaco and Luxembourg.
3. Singapore
Median home price: $1.34 million
4. Seoul, South Korea
Median home price: $921,600
5. Bern, Switzerland
Median home price: $773,896
Number of annual salaries it would take to buy: 11
Bern falls among the cities on the more affordable side for residents, where they could afford a home within 11 years, according to NetCredit's calculations.
6. Jerusalem
Median home price: $744,222
7. Canberra, Australia
Median home price: $712,474
8. Wellington, New Zealand
Median home price: $691,480
9. Washington, D.C.
Median home price: $681,691
Number of annual salaries it would take to buy: 9.6
Washington, D.C. lands among the 10 most affordable cities, based on 9.6 years of salary to buy a median-priced home.
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10. Beijing
Median home price: $651,050
Number of annual salaries it would take to buy: 37.6
Beijing is among the least-affordable cities.
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11. Amsterdam
Median home price: $632,793
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12. London
Median home price: $602,216
13. Oslo, Norway
Median home price: $600,591
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14. Nassau, Bahamas
Median home price: $591,830
15. Copenhagen
Median home price: $581,370
16. Paris
Median home price: $565,760
17. Tehran, Iran
Median home price: $547,536
Number of annual salaries it would take to buy: 158.4
Tehran is the capital city where home prices are the least affordable for its residents.
18. Brussels, Belgium
Median home price: $528,057
19. Abu Dhabi, United Arab Emirates
Median home price: $517,483
20. Vienna
Median home price: $500,717
21. Ottawa, Canada
Median home price: $476,679
Number of annual salaries it would take to buy: 12.5
Ottawa is among the more affordable cities.
22. Berlin
Median home price: $473,619
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23. Dublin, Ireland
Median home price: $427,000
Number of annual salaries it would take to buy: 11.9
Dublin is one of the most affordable capitals in the ranking.
24. Tokyo
Median home price: $425,068
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25. Stockholm, Sweden
Median home price: $405,444
Number of annual salaries it would take to buy: 11.6
26. Lisbon, Portugal
Median home price: $388,601
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27. Edinburgh, Scotland
Median home price: $371,169
28. Madrid
Median home price: $341,992
29. Cardiff, Wales
Median home price: $339,250
30. Helsinki, Finland
Median home price: $333,442
Number of annual salaries it would take to buy: 10.7
31. Rome
Median home price: $305,691
32. Zagreb, Croatia
Median home price: $256,938
33. Athens, Greece
Median home price: $253,906
34. Hanoi, Vietnam
Median home price: $251,000
Number of annual salaries it would take to buy: 45.4
Hanoi is among the least affordable cities on this list for its residents.
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35. Bratislava, Slovakia
Median home price: $234,807
36. Santo Domingo, Dominican Republic
Median home price: $227,809
Number of annual salaries it would take to buy: 42.4
Santo Domingo is one of the least affordable cities.
37. Moscow
Median home price: $215,649
Number of annual salaries it would take to buy: 11.9
Moscow is very affordable for residents. The homeownership rate there was 90% in 2020, according to Statista.
38. Manila, Philippines
Median home price: $212,438
Number of annual salaries it would take to buy: 42.2
39. Belgrade, Serbia
Median home price: $211,052
40. Santiago, Chile
Median home price: $209,748
41. Bangkok, Thailand
Median home price: $193,000
Number of annual salaries it would take to buy: 28.5
At 28.5 years' annual salary for a median-price home, Bangkok is pretty unaffordable for residents.
You can see the full ranking and methodology for this study at NetCredit.com.
