The Economist: Budapest tops list for most unaffordable rental prices!

Based on The Economist’s recently coined Carrie Bradshaw index, Budapest emerges as the priciest European city for solo flat rentals.

According to Qubit, the Carrie Bradshaw index, introduced by The Economist in 2023 and inspired by the iconic character from the famous Sex and the City series, assesses the affordability of single occupancy flats.

In 2023, The Economist assessed the real estate landscape of the USA, and this year, they turned their attention to the European market, unveiling some startling findings.

Their analysis spanned from Ankara to Warsaw and included 35 European cities. The Economist asserted that no one should pay more than 30% of their pre-tax income to rent an average one-bedroom flat.

To facilitate comparisons, the paper converted income figures to USD. London and Geneva emerged as the two most expensive European cities, demanding a minimum annual income of USD 95,000 to secure the rental of an average one-bedroom flat. Conversely, at the other end of the spectrum lies the Turkish capital, Ankara, where a modest USD 18,000 annually is sufficient for a one-bedroom flat without compromising on essentials.

Budapest and several other CEE region cities deemed unaffordable

However, prices and incomes differ in Europe, which prompted the authors at The Economist to devise the Bradshaw scale. This adjustment factors in average wages relative to renters’ wages, with the wage being tied to the workplace location rather than residence. The Economist relied on open-source official data throughout this process.

The implications are rather gloomy concerning Budapest and Hungary. The Hungarian capital is at the top of The Economist’s latest index, signifying that individuals in Budapest must allocate the highest proportion of their yearly or monthly income towards rent. Consequently, Budapest stands out as the most unaffordable city for solo occupants who do not own an apartment.

Trailing behind the Hungarian capital are Prague and Lisbon. Within the CEE region, Zagreb, Bratislava, Sofia, Bucharest, Warsaw and Ljubljana all share the burden of hefty rental prices. Limited to Central and Eastern Europe, only Berlin and Vienna offer some relief to renters with their affordability.

The Economist underscores that the average wage falls short by half of what is required, which might be another contributing factor why tens of thousands of Hungarians seek work abroad. Notably, a record number of Hungarians have found employment in Austria, a trend covered in our previous article.

Read also:

• Trend change: rental prices rise again in Hungary – Read more HERE
• Mini Dubai to rewrite Budapest property market: what should we expect? – Details in THIS article