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Times are weird on the property market — and on a global scale. The COVID pandemic radically shook up our view of where and how we desired to live, and it also fundamentally changed many peoples’ options for doing so. On balance, prices grew; but now, in the fallout of the pandemic and with the added complication of the energy crisis and war in Ukraine, they’re on their way down.
Higher interest rates and the cost of living have forced down housing demand, although a general shortage of houses on the market has kept prices from bombing. Meanwhile, wages are dropping in real terms (with a particular impact on lower-income workers), further deterring potential buyers from spending.
According to Oxford Economics, nearly all 38 OECD nations are likely to see a deceleration in house price growth, with prices actually falling in more than half of them. This would be the widest slowdown in housing price growth for over 22 years. And according to the IMF, real house prices could drop by 25 percent in emerging markets over the next three years and by 10 percent in advanced markets (although this is a worst-case view).
So, where do things stand globally right now? NetCredit has calculated the average home price in total and per square meter in capital cities worldwide and compared them to local incomes to see where we are.
Microstate Monaco has the most expensive homes in the world, averaging $4,475,000.
The capital with the cheapest average home is Havana in Cuba ($40,569). Tehran, in Iran, is the capital with the worst affordability of homes, with the average property costing 158.4 times the average annual salary.
The South African capital, Pretoria, has the best affordability, with the average home costing just 4.7 times the average wage.
The Median Price of Homes in Capital Cities Around the World
According to the International Monetary Fund’s Global Housing Watch, house prices have been rising consistently since the 2008 financial crisis, costing an average property $176,000. But how much will a home cost you in global cities?
According to our research, a place in Monaco will cost you three times more than any other capital. With a median of $4.48m, the principality is significantly more expensive than Luxembourg ($l.42m) and Singapore ($l.34m).
Where Homes Cost the Most and Least Per Square Meter
U.S. Census data shows that the average size of an American home is 225 square meters, but where can you get the best value for money in major cities worldwide?
At just $234 per square meter, Havana in Cuba has the cheapest properties of any capital city. However, you will need a second mortgage for a place in Monaco. At $52,000 per square meter, properties cost more than triple those of Singapore, which will set you back $15,009 per square meter.
The Capital Cities Where Homes Are The Most And Least Affordable
Living in your nation’s capital often comes at a premium, but which cities are the most and least affordable? Saving up for 4.7 years in South Africa will get you home in Pretoria at the country’s average price, making it the most affordable capital in the world.
Despite high average costs in Washington D.C, residents can afford the median home price in 9.6 years. Meanwhile, Tehran is the world’s least affordable city – with the average property costing 158.4 years of earnings to own.
The European Cities Where Homes Are The Most and Least Affordable
Europe is home to some of the most beautiful homes on the planet, from lavish Mediterranean villas to cozy Alpine chalets. But how far can your earnings go when it comes to buying property in the continent’s capital cities?
Analysis shows that Belfast is the most affordable European capital, with Northern Irish residents working for 6.9 years to save for a home. However, Monaco natives will need 71.9 years’ worth of earnings to buy a home in the iconic principality at the average price.
Methodology
This dataset was collected using two methods: NetCredit’s own country-by-country analysis of property listings and manual research to find property analyses conducted within the last 12 months from local real estate businesses in each nation.
The NetCredit team collected the property listings for 73 global capital cities from different sources and converted the prices and the floor areas to USD and square meters accordingly.
They then calculated the median home prices and prices per square meter for each city in the database. The NetCredit team also collected the average monthly net salary from numbeo.com and then computed affordability to ascertain the number of years worked to earn a median home value.
To supplement this data, NetCredit manually examined property examinations performed in each nation in 2022 to cross-reference against our own data and to add additional capital cities where their property websites lack specific data points.
