Least affordable countries;
Credit: Compare The Market
A study carried out by Compare The Market has revealed that Luxembourg is the third least affordable country to buy a property in the world.
The study analysed average property prices per square metre as well as the average disposable household income in 38 countries to calculate the cost per square metre as a percentage of annual income.
The least affordable country for property was South Korea. With the highest price per square metre (€11,396.85) and an average household disposable income of €19,199.27, its affordability ratio came to around 59.4%.
Israel was the second least affordable country. Although it had a lower property price of €6,667.35 per square metre, Israel had an average disposable income of €21,814.81, bringing the affordability ratio to around 30.6%.
The third least affordable country according to Compare The Market was Luxembourg, with an affordability ratio of 28.9%. The average disposable income in Luxembourg was fairly high compared to other countries at an average of €34,450.25, whilst the property price averaged around €9,962.76 per square metre.
Stephen Zeller, General Manager of Home and Contents Insurance at Compare the Market, commented: "Trying to buy a property right now is harder than it's ever been, largely thanks to the pandemic in particular. Whilst property prices, costs of living and property shortages are reaching new highs, wages and disposable income has struggled to keep up which means that for some, the property buying process may at times feel impossible".
"However, annual incomes and property prices vary a lot from one country to the next, and so it's not bad news for everyone, especially for the countries that rank in the topmost affordable places to buy property", he added. "The same can also be said for countries where affordability has plunged. Buyers can still have some luck finding areas with accessible housing if they are willing to sacrifice on proximity to major metropolitan areas, as an example".
As for the most affordable countries in which to buy a property, Turkey (€645.87 per square metre; €16,058 disposable income; affordability ratio of 4.0%), the United States (€2,496.92 per square metre: €39,732 disposable income; 6.3%) and Mexico (€863.91 per square metre; €12,253 disposable income; 7.1%) made the top three in this study.
