Can You Afford to Live in the Best Cities? Rental Rates Around the Globe

It is a dream to live in the best cities in the world whether it is in the centre of Lagos or in the suburbs of London. The question, however, is how does a city stand out from others? Probably the best answer is in how high the chances are that you can land a good opportunity while living there. With a nice environment and the prospect of employment, it would definitely sound perfect to live in such a city; much more if you can comfortably afford the cost of living there.

The ideal location is not only determined through the amount of income one can earn but also through the prices of the local housing units. The affordability of basic commodities is often used as an indicator in finding the best cities of the world, along with the ease of doing business, structures built by the best contractors, facilities in the city, and more. Apartment search website RENTCafé conducted a research on rental affordability in the 30 Best Cities of Opportunity. In order to do that, they took into consideration the cost of living in them plus the average salary earned by employees. When moving to a new city, will you be able to sustain the expenses of living as a renter?

Household Income vs Housing Rent

Rent-to-Income ratio is the amount or percentage of a person’s salary that goes to the payment of the rental. The study featured the top-30 list and sorted out which ones are preferred for the most affordable flats. Ideally, rent should not exceed a total of 30% of the household income for it to be considered burden-free. An amount higher than that but not more than 50% of the income is considered moderate while a rent going over 51% is severely rent-burdened.

Cities of Affordable Housing Rentals

With that standard, Kuala Lumpur, Moscow, and Johannesburg claimed the top three spots. Interestingly, the initial top three on the top-30 list have moved farther down on the list. In fact, London who was initially the best city has moved to the 22nd place with a rent-to-income ratio of 40%. However, some of those that were at the bottom of the list have remained close to their initial rank, if not higher. For one, Sydney has moved to the 9th spot from its initial position on the 10th. It remains burden-free with only 29% of the household income going to the rental.

Luxury Cities with Luxurious Rents

Using the same basis, Mexico City, Manhattan, and Lagos falls to the bottom of the list due to the high rate of housing rental prices. Los Angeles doesn’t rank too far behind from them as well. It can take up an approximate of 47% of a person’s household income which falls under moderate-burden. Paris and Singapore are just a few percentages better with 46% and 44% respectively. Choosing to live in these cities would need some compromise in the budget. A few bucks off the clothes shopping allocation wouldn’t hurt too much, would it? On the brighter side though, there are still other cities that offer good opportunities with much more affordable rentals.

Living in big cities especially those that are branded to be the best in the world is not all sunshine and daisies. Some places with taller buildings and faster transactions come with the price of paying a more expensive rent, while other places that are lower in rank than those on top have the affordable ones. It goes to show that when you want something, you really do have to give up something else.

Posted On 05 Aug , 2017

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