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RENTCafe ranked cities around the world according to their rent-to-income ratio to determine the “world’s best cities for renters.”
A new study by PwC reveals the top 30 cities around the world with the best opportunities for renters. The global professional services firm analyzed 67 data variables to find out the underlying makings of a great city, and came up with three ingredients for a healthy urban existence: tools for a changing world, quality of life, and economics. Researchers specifically looked at infrastructure, sustainability, education, transit, health and more, to determine the ranking.
But comparing infrastructure and intellectual capital doesn’t determine how cities compare in regards to affordability and overall financial quality of life. So researchers at RENTCafe took the study just one step further: they used the data provided by PwC’s Top 30 list and compared the rent-to-income ratio in each city. After all, when determining true affordability of any given area, it’s not enough to list average rent prices from various cities side-by-side without looking at the median income as well.
If you’re spending (or throwing away?) 50% of your income on rent, surely that negatively influences liveability and personal financial wellbeing, especially in comparison to a city with, let’s say, 30% rent-to-income.
“Traditionally, housing costs exceeding 30% of the household income have been viewed as a red flag,” reports RENTCafe. “Thus, we considered the cities where the average rent was 30% or less of the local median household income to be burden-free. We also divided the remainder of the list in two: moderately (31-50% rent to income) and severely rent-burdened cities (upwards of 51%),” they write in their report.
1. Kuala Lumpur, Malaysia
2. Moscow, Russia
3. Johannesburg, South Africa
4. Bogotá, Colombia
5. Rio de Janiero, Brazil
6. São Paulo, Brazil
7. Beijing, China
8. Shanghai, China
9. Sydney, Australia
10. Milan, Italy