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High cost of living: Warsaw more expensive than Berlin and Oslo

High cost of living: Warsaw more expensive than Berlin and Oslo

Image source: Β© canva
Marta Grzeszczuk,
27.02.2024 15:00

A leading economics magazine has calculated the costs of renting a flat in various European cities. Warsaw was found to be unaffordable.

The Economist magazine developed a new measure called the Carrie Bradshaw Index last year. It calculates the affordability of renting an apartment in major American cities by comparing average earnings and rental costs. The index determines where the "Sex and the City" protagonist would most likely reside. This year, the publication has extended its scope and now includes the best rental deals for Carrie in Europe.

Rental costs in European cities

The study considered 35 European cities, including London and Ankara, and determined the recommended salary required to rent an average one-bedroom flat while maintaining financial security. The criterion was that the rental cost should not exceed 30% of monthly earnings.

Warsaw was the only Polish city included in the ranking. London and Geneva were found to require the highest annual incomes for single renters, which amounts to more than PLN 30,000 per month. However, their average earnings differ significantly. Geneva is much easier to afford than London when it comes to renting. The least expensive city for rent was Ankara, where an income of less than PLN 6,000 per month is sufficient to live alone. All income amounts are gross, and the data used is no older than 2023.

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High housing costs burden Warsaw residents

According to The Economist, renting a flat in Warsaw requires a "recommended renter's wage" of PLN 10,200. This is the third lowest amount among 35 cities, which include Paris, Berlin, Rome, and Madrid. However, the average salary in Warsaw is around PLN 9.1 thousand, lower than the recommended wage.

The Economist has also created a ranking of the most affordable and unaffordable cities to rent a flat in Europe based on the difference between the real incomes of residents and the "recommended renter's wage." Budapest, Prague, Lisbon, Zagreb, Dublin, and London are the cities with the greatest disparity between real wages and rental prices.

Which European cities are cheaper than Warsaw?

In several European cities, renting a flat won't consume more than a third of monthly earnings. These cities include Vienna, Helsinki, The Hague, Brussels, and Lyon. Among the cities with affordable rent relative to average salary, two of the three cheapest cities are in Germany, namely Bonn and Karlsruhe. The third city in the top ranking for affordable rent is the Swiss city of Bern.

Warsaw is in the middle of the housing affordability rank. Renting in the Polish capital is relatively cheaper than in Riga, Stockholm, and Athens. However, renting in Warsaw is as unaffordable as in Paris, Munich, or Copenhagen. Apart from the top-ranking affordable cities, renting is also relatively cheaper in Berlin, Oslo, or Luxembourg than in Warsaw.

Source: economist.com

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