In this article, we will discuss the 25 European cities with most affordable monthly rents. If you want to skip our discussion on the real estate market in Europe, you can go directly to the 5 European Cities With Most Affordable Monthly Rents.
The European real estate market is being broadly driven by urbanization and an escalating demand for both residential and commercial places in cities. As more people move to urban areas for employment, the demand for housing, office space, and retail business places is experiencing growth. However, experts find the real estate industry at a delicate crossroads, as rising interest rates linked with growing inflation push Europe towards a recession. Furthermore, the conflict in Ukraine has created a profound impact across the region. Every sector, including real estate, is now grappling with the economic and political consequences that will shape the landscape in the coming years.
Political unrest, rising energy costs, and inflationary pressures have acted as significant factors in inflating construction costs and choking supply chains. According to a report by PricewaterhouseCoopers, among the factors that have impacted the real estate market the most over the last 10 years are interest rates (76% significance), the 2007-8 financial crisis (64% significance), urbanization (63% significance), and use of technology (63% significance). Between 2010 and the second quarter of 2023, European Union countries witnessed an increase of 21.2% in rental prices and a rise of 46.3% in house prices. Meanwhile, in the second quarter of 2023, a year-on-year analysis indicated a 3.0% rise in rents and a 1.1% reduction in house prices. The persistent trend of high rents in European cities can be attributed to the familiar dynamics of supply and demand. The imbalance, where demand surpasses supply, contributes to inflated prices. Furthermore, the concentration of high-paid professionals in prime locations, limited available space, and high land and construction costs also contribute to rising rents.
According to the Deloitte Property Index 2023, Dublin and Oslo claimed the top spots for the cities with the most expensive rents. On the other end of the spectrum, two Eastern European cities were recognized for offering the cheapest rents. The index also revealed that Slovakia ranked as the least affordable country among 21 European countries that were surveyed for homeownership. Slovakians would require 14.1 gross annual salaries, on average, to purchase a new home. In comparison to the previous year, the affordability of homeownership has declined by the equivalent of 1.4 gross annual wages. You can also check out the 20 Cheapest Countries to Live in Europe here.
Some of the notable real estate companies with significant operations in Europe include SEGRO (LON:SGR), Goodman Group (ASX:GMG), and Digital Realty Trust, Inc. (NYSE:DLR). Here’s what Baron Fund said about Digital Realty Trust, Inc. (NYSE:DLR) in its Q3 2023 investor letter:
“We recently increased the Fund’s exposure to data center REITs by acquiring additional shares in Equinix, Inc. and re-initiating a position in Digital Realty Trust, Inc. (NYSE:DLR).
25 European Cities With Most Affordable Monthly Rents
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Our Methodology
We shortlisted the 25 European cities with most affordable monthly rents by analyzing data from reliable sources such as LivingCost and Numbeo. The affordability rankings were based on the rental costs for 1-bedroom apartments situated in the city center. These cities have been arranged in ascending order of their monthly rental rates in US dollars as of 2023. With this context in mind, let's begin our rent comparison by city.
25 European Cities With Most Affordable Monthly Rents
25. Timișoara
Country: Romania
Monthly Rent: $406
Timișoara, with a population of 0.25 million, has an average cost of living of $777. This city is recognized for its specialization in light engineering, contributing significantly to various industries. Timișoara's industrial prowess also includes the manufacturing of electric motors, textiles, farm machinery, chemicals, and plastics.
24. Chisinau
Country: Moldova
Monthly Rent: $393
Chisinau is the capital of Moldova and is home to a population of 0.64 million. The city has an average cost of living of $741.
23. Presov
Country: Slovakia
Monthly Rent: $393
Presov, with a population of around 83,000, has an average cost of living estimated at $857. This city plays a crucial role as both an important rail and road junction.
22. Iași
Country: Romania
Monthly Rent: $392
The average cost of living in Iaşi stands at $716. The city's primary industries include food and beverages, chemicals, metallurgy, and pharmaceuticals.
21. Dnipro
Country: Ukraine
Monthly Rent: $392
Dnipro is primarily an industrial city with a huge iron and steel industry. The city's industrial landscape extends to large engineering sectors, light-industrial machinery, and the production of radio equipment. The city has an average cost of living of $675.
20. Szeged
Country: Hungary
Monthly Rent: $383
Szeged has an average cost of living of $783. The city stands out as an economical choice, with a cost of living that is 4.68 times cheaper than that of New York.
19. Minsk
Country: Belarus
Monthly Rent: $379
Minsk has a population of 2 million and an average cost of living of $643. It is the capital of Belarus and is known for its truck and tractor manufacturing and allied industries.
18. Yekaterinburg
Country: Russia
Monthly Rent: $375
Yekaterinburg has an average cost of living of $628 and a median after-tax salary of $645. The city is one of the major industrial centers of Russia, especially for heavy engineering. It is 6.06 times cheaper to live in Yekaterinburg than in New York.
17. Novosibirsk
Country: Russia
Monthly Rent: $371
The average cost of living in Novosibirsk stands at $608, while the median after-tax salary is $476. It is the chief city of western Siberia and is well-developed due to its proximity to the Kuznetsk coalfield. The city is a major industrial manufacturing center with engineering, non-ferrous metallurgy, and food processing as the dominant sectors. It is 6.3 times cheaper to live in Novosibirsk than in New York.
16. Kazan
Country: Russia
Monthly Rent: $364
Kazan has an average cost of living of $554 and a median after-tax salary of $479. Major industries in the city include refineries, precision engineering, and chemicals. The city is at the sixteenth position on our list of 25 European cities with most affordable monthly rents.
15. Pristina
Country: Kosovo
Monthly Rent: $360
Pristina, the capital of Kosovo, stands out for its economic significance and role as a transportation hub. With an average cost of living at $554 and a median after-tax salary of $479, Pristina offers residents an economical environment.
14. Burgas
Country: Bulgaria
Monthly Rent: $358
Burgas offers an average cost of living of $681 and a median after-tax salary of $733. This coastal city is characterized by diverse industries, including the processing of flour, sugar, and fish, as well as engineering and oil refining.
13. Plovdiv
Country: Bulgaria
Monthly Rent: $344
Plovdiv is Bulgaria’s second-largest city. The city has an average cost of living of $706. Major sectors in Plovdiv revolve around the production of nonferrous metals, machinery parts, textiles, carpets, and fertilizers.
12. Krasnodar
Country: Russia
Monthly Rent: $342
Krasnodar has an average cost of living of $525 and a median after-tax salary of $493. The city is mainly an agricultural region that produces grains and sunflowers, tobacco, and sugar beets. Petroleum and natural gas are also extracted in the region. It is 7.69 times cheaper to live in Krasnodar than in New York.
11. Skopje
Country: North Macedonia
Monthly Rent: $329
Skopje is the capital of North Macedonia. The city has an average cost of living of $713. Skopje is an industrial hub with varied industries ranging from electrical goods to bricks and ceramics, leather processing, woodworking, steelworks, chemicals, and cement.
10. Nis
Country: Serbia
Monthly Rent: $327
Nis has an average cost of living of $683 and a median after-tax salary of $612. The city’s main industries include mechanical engineering, tobacco products, and electronics. It is 5.43 times cheaper to live in Nis than in New York.
9. Vlore
Country: Albania
Monthly Rent: $320
The average cost of living in the city is $657, with a median after-tax salary of $429. It is 5.83 times cheaper to live in Sarajevo than New York. Vlore has an active fishing and canning industry.
8. Sarajevo
Country: Bosnia and Herzegovina
Monthly Rent: $315
Sarajevo has secured the eighth position on our list of the 25 European cities with most affordable monthly rents. The city is the capital of Bosnia and Herzegovina and has an average cost of living here of $739.
7. Banja Luka
Country: Bosnia And Herzegovina
Monthly Rent: $299
The city is the administrative center of Republika Srpska. Banja Luka has an average cost of living of $737 and offers a median after-tax salary of $634.
6. Nizhny Novgorod
Country: Russia
Monthly Rent: $286
With a population of 1.25 million, Nizhny Novgorod is a prominent Russian city known for its economic prowess. The average cost of living in Nizhny Novgorod is $623, complemented by a median after-tax salary of $484. The city is home to several offshore outsourcing software developers like Bell Integrator, Tecom, MERA, Auriga, SoftDrom, and Teleca, along with other smaller companies specializing in the delivery of telecommunication services.
Among popular companies operating in the European real estate market are SEGRO (LON:SGR), Goodman Group (ASX:GMG), and Digital Realty Trust, Inc. (NYSE:DLR).
