As inflation and the rising cost of living continue to put pressure on household budgets across Europe, affordability has become one of the defining economic issues for the average European citizen.
Tirana has been ranked the second most expensive city in Europe, as a family of four with two adults earning an average salary spends 89% of its income to maintain a normal standard of living.
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At these levels, Tirana ranks only behind Lisbon, which tops the list in Europe with a level of 12195.8%.
The data were made public in a recent report by Tradingpedia. To find out which capitals offer the best standard of living with the smallest financial burden relative to monthly income, Tradingpedia compared data from 37 European capitals, taking into account daily expenses and average monthly net salaries (the “real” salary after all taxes and deductions are subtracted from gross pay). The information for Albania was processed by Monitor.
The report takes into account the net salary, which for Albania is 760 euros per month, and calculates family income at 1,520 euros per month, assuming that two adults are working. Monthly expenses for a family of four are estimated at 1,353 euros, meaning nearly 90% of income must be spent.
Albania has a much higher cost of living than other countries in the region. In Skopje, North Macedonia, where the average net salary is at levels similar to Albania, at 769 euros per month, monthly expenses for a family of four are 1,037 euros, accounting for 67% of income, much less than in Albania.
In Belgrade, where the net salary is 1,081 euros, the share is 68.2%, while monthly expenses are slightly higher than in Tirana, reaching 1,478 euros, but net salaries are around 30% higher.
In Podgorica, the average monthly net salary is 883 euros, higher than in Albania, and monthly expenses are lower at 1,077 euros, making Sarajevo relatively the city with the lowest cost of living in the region in relation to income.
Data for Kosovo are not included in this report.
The cheapest city to live in is Brussels, where the average monthly net salary for one person is 2,945 euros, while monthly expenses are 2,653 euros, or 45% of income.
The report
The report provides a detailed analysis of basic expenses, including housing, food, transport, personal care and entertainment, to give a clear picture of affordability across the continent.
According to the latest data on living costs and salaries in 37 European capitals, Lisbon has become the clearest example of the worsening housing affordability crisis in Europe. In Lisbon, the average monthly rent for a one-bedroom apartment in the city center is now 1,331.48 euros, while the average net salary is only slightly higher, at 1,342.83 euros.
This means tenants spend virtually 99.15% of their monthly income on housing alone, leaving them with an average of just 11 euros after rent is paid.
The pressure is not limited to Portugal. Albania’s capital, Tirana, ranks as the second least affordable city on our list by the rent-to-salary ratio, with rents consuming more than 93% of local wages.
In Kyiv, despite significantly lower rental prices in absolute terms, wages remain so low relative to housing costs that residents still spend nearly 88% of their income on rent.
Porto, Milan and Malaga also stand out among Europe’s most burdened rental markets. In Porto, tenants spend more than 85% of their salary on rent, while Milan and Malaga require roughly three-quarters of monthly income for centrally located housing.
It appears that affordability problems are no longer limited only to Europe’s traditional financial capitals; they now also affect mid-sized cities and high-tourism destinations.
Southern Europe appears particularly exposed. Alongside the places mentioned above, Spanish and Italian cities dominate the upper part of the affordability ranking, with Barcelona, Valencia, Naples and Rome all requiring between 60% and 70% of average net wages for rent.
In many of these cities, tourist demand, the growth of short-term rentals and the limited housing supply continue to push prices beyond what local incomes can realistically afford.
Where tenants save the largest share of their salaries
At the other end of the spectrum, some cities in Central and Northern Europe remain relatively affordable once local wages are taken into account. Germany appears particularly affordable, with cities such as Essen, Mannheim, Nuremberg and Dresden, where residents can save between 76% and 81% of their salary after paying rent.
Essen ranks as the most affordable rental market in Europe on our list. Once known as Germany’s industrial heart, it is now one of the greenest cities in Europe, which, together with its lower cost of living compared with cities such as Munich or Frankfurt, makes it an ideal place for affordable living in Western Europe.
The average rent for an apartment in the city center is just 551.56 euros, representing only 18.9% of local monthly wages.
Mannheim ranks second and, besides being an industrial and commercial center, it is also a university city that is home to the University of Mannheim. Here, tenants, including many students, spend an average of 804 euros per month, or around one-fifth of typical local income, on housing.
Swiss cities also stand out in the ranking as favorable places to rent based on local wages, despite having some of the highest rents in Europe. In Zurich, an average apartment costs more than 2,600 euros per month — the highest figure among the 127 cities analyzed — but exceptionally high wages (7,424.32 euros net per month) mean residents still have nearly 65% of their income left after paying rent.
Basel, Bern and Lausanne also show high rents, but in terms of the rent-to-income ratio, they are even more affordable. Switzerland’s strong presence in this ranking shows that wage growth remains one of the strongest protections against the pressure of housing costs and prices.
Nordic cities also continue to show relative stability. In Copenhagen, Aarhus, Oslo and Bergen, rents remain high in absolute value, but are offset by higher incomes and lower rent-to-income ratios than in many Southern European cities. /Monitor
