Not Only Korea: "Most European Cities Also Unaffordable for Average Earners to Pay Rent"

An analysis revealed that in most European cities, average earners face housing costs that make it difficult to afford monthly rent.

An analysis revealed that in most European cities, average earners face housing costs that make it difficult to afford monthly rent. Photo to aid understanding of the article

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On the 28th (local time), Yonhap News cited the British weekly magazine The Economist, reporting that "only 8 out of 39 European cities surveyed exceeded the benchmark of 1 on the 'Carrie Bradshaw Index,' which evaluates whether an average income earner can afford to live alone and pay monthly rent."

The 'Carrie Bradshaw Index,' named after the single female protagonist of the American drama "Sex and the City," indicates that a value below 1 means rent is unaffordable, while a value above 1 means there is more income flexibility. The index is calculated by comparing the average wages in each city, as determined by the Economic Research Institute (ERI), with the average monthly rent for a one-bedroom apartment in each city, based on data from Eurostat, the statistical office of the European Union. The publication also calculated how much a tenant would need to earn in order to keep rent within 30% of their income, a standard commonly used to assess housing affordability.

According to this analysis, as of last year, the city with the highest required annual salary to afford the average monthly rent for a one-bedroom apartment was Geneva, Switzerland (102,000 euros, or about 175 million won). This was followed by London, United Kingdom (94,000 euros, or about 161 million won), Stockholm, Sweden (84,000 euros, or about 144 million won), and both Dublin, Ireland and Oslo, Norway (each at 80,000 euros, or about 137 million won).

Cities where the index was low, indicating high rent relative to wages, included Tbilisi in Georgia, Prague in the Czech Republic, Belgrade in Serbia, Budapest in Hungary, and Lisbon in Portugal. Stockholm, London, Dublin, and Madrid in Spain also scored below 0.7, while Munich in Germany, Paris in France, Geneva, and Copenhagen in Denmark were all below 0.9. Berlin, Germany (1.01) barely surpassed the benchmark, while Luxembourg City in Luxembourg, Vienna in Austria, Helsinki in Finland, Brussels in Belgium, Bern in Switzerland, Lyon in France, and Bonn in Germany had relatively high wage levels compared to rent.

In December last year, the European Union introduced a Europe-wide real estate policy called the "Affordable Housing Supply Plan."

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European cities are struggling with rising rental prices. According to an analysis by European real estate company Catella, as of the third quarter of last year, rents increased by about 3.1% year-on-year in 48 out of 59 European cities. In addition, as of the first quarter of last year, the average monthly rent in European cities was 20.02 euros per square meter (about 34,240 won at current rates). Dublin, Ireland (40.00 euros per square meter, about 68,400 won), London, United Kingdom (39.30 euros per square meter, about 67,200 won), and Geneva, Switzerland (34.50 euros per square meter, about 59,000 won) ranked highest.

In response, the European Union introduced a Europe-wide real estate policy called the "Affordable Housing Supply Plan" last year. In December last year, the European Commission, the EU's executive body, stated, "Housing shortages are becoming increasingly severe in most parts of Europe, so a solution that covers the entire continent is needed," adding, "Supplying affordable housing is one of the most urgent challenges."

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