The Cost and Affordability of Homes Around the World

How much do homes cost in other countries, and are they affordable for residents? Here's a ranking of 42 capital cities, where the median home price ranges from nearly $5 million to below $200,000.

Mar 21, 2023 - 18:30

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The Cost and Affordability of Homes Around the World

How much do homes cost in other countries, and are they affordable for residents? Here's a ranking of 42 capital cities, where the median home price ranges from nearly $5 million to below $200,000.

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) - Get Free Report, 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.

The median home price in Monaco 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.

In Luxembourg, the median home price is $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.