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Where are Europes most expensive cities for renters?

LAST YEAR The Economist created the Carrie Bradshaw index, a measure of the affordability of renting alone in America’s largest cities, just as the star of “Sex and the City” managed to do in New York. This year we sent Carrie to Europe, in search of a new adventure and, perhaps, a better deal on rent.

Our European ranking includes the 35 cities for which the data are available, ranging from London to Ankara. Using a popular guideline that states that no more than 30% of an individual’s pre-tax income should be spent on rent, we calculated the wage needed to comfortably afford the average one-bedroom flat in each city, what we call our “recommended renters’ wage” (see chart 1).

At over $95,000 (all incomes are given in dollars, for ease of comparison), London and Geneva require the highest annual incomes for solo renters. In both cities less than 1% of residential housing is unoccupied: tight markets make for high prices. At the bottom of our ranking is Ankara, Turkey’s capital, where an income of less than $18,000 is enough to live alone.

But incomes vary significantly across the continent. To find out where a one-bedroom apartment lies within reach for the average earner, we developed the “Bradshaw score”. This compares our recommended renters’ wage with the average salary in each city, using data from the ERI Economic Research Institute, a pay aggregator. The higher the score, the more affordable it is to rent alone.

By this measure Budapest is the priciest city for would-be renters. Hungary had the highest inflation rate of any EU country for much of 2023; rental costs in the capital increased by 19% from 2022. Portugal’s capital also has one of the biggest rent-wage gaps in our index. Rents have soared in Lisbon after an influx of “digital nomads”, tech workers lured by sunny weather and cheap visas. (ERI data is based on where you work, not where you live, to account for commuters.) The average wage of $31,000 is roughly half the $58,000 now needed to afford a one-bed. Renting alone in both cities is almost as difficult as it is in New York, relative to average wages.

Some of the most affordable cities are in Germany. In Bonn the average salary of $53,000 comfortably surpasses the $36,000 needed to rent alone, giving it the highest Bradshaw score in our index. Berlin, the German capital and home to huge protests against rent rises in recent years, and Karlsruhe, in the south-west, also score above 1.

Aspiring Carries hoping to make it closer to Paris, Europe’s fashion capital, could settle for Lyon, one of France’s culinary hotspots. The average wage of $45,000 is significantly above the $34,000 needed for a one-bedroom. Great news for Carrie—if she can stomach the tablier de sapeur.

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Abbie Anker

Update: 2024-05-21