"How many years of salary are you short to buy? The 5-minute check

A Dutch family needs more than fifteen years of gross salary to buy a new 70 square metre apartment in Amsterdam. In Turin or Odense, five years are enough. Same continent, same currency in many cases, yet a threefold gap in the effort demanded of a household.

Working out how many salaries to buy a home in Europe has become the real thermometer of the residential market. It tells you far more than a price per square metre, because it combines the two variables that actually matter: what property costs and what people earn. And for an investor, it opens up a second reading that is often counter-intuitive: the markets where buying is hardest are frequently the ones where rental yields are weakest.

This article breaks down the calculation method, presents the real ranking of major European cities, shows how secondary cities halve the effort required, and explains why an expensive home is not automatically a poor investment.

The number that describes the market better than price per square metre

Price per square metre is an appealing metric because it is simple. It is also deeply misleading as soon as you compare two countries. An apartment at 8,760 euros per square metre in Luxembourg, which became Europe's most expensive country for new-build housing in 2025, tells you nothing if you ignore the fact that the average net salary there exceeds 4,000 euros a month.

The years-of-salary ratio solves this problem. It answers a concrete question: how long would a household have to work, devoting every euro of income to the purchase, to pay for its home outright. Nobody actually does this, of course. But the indicator captures the tension between local purchasing power and property valuations, something no absolute price can do.

Its strength is clearest over time. Between 2015 and the end of 2025, house prices in the European Union rose by 64.9%. Rents, over the same period, increased by 21.8%. Salaries, meanwhile, grew far more slowly than prices in most countries. This gap explains why affordability has mechanically deteriorated almost everywhere, even in cities where headline prices looked reasonable.

The trend is not reversing. In the first quarter of 2026, house prices rose a further 5.1% year on year across the EU and 4.7% in the euro area, while rents gained 3.0%. Over a single quarter, prices climbed 1.2% against 0.7% for rents. The gap keeps widening, quarter after quarter.

For an investor, this indicator has a second use. A rising price-to-income ratio signals a valuation drifting away from local economic fundamentals. That can reflect powerful external demand, foreign investors, cash buyers, or a structural supply shortage. But it also signals an increasingly narrow local tenant base, and therefore a risk to tenants' future ability to absorb rent increases. It is one of the key metrics to understand before investing in real estate.

How to calculate how many salaries to buy a home in Europe

The European benchmark for this metric rests on a precise definition: the number of average gross annual salaries needed to buy a standardised new-build 70 square metre apartment. Every term in that sentence matters.

New-build, first of all. New properties cost structurally more than existing stock, with gaps that vary sharply from one country to another. Using new-build standardises the comparison but mechanically inflates ratios compared with what a real buyer would pay on the resale market.

Gross annual salary, next. Not net, not median, not household income. This means that in countries with heavy tax and social contributions, the real effort for a buyer is significantly higher than the headline figure suggests.

Finally, this is an individual salary. In reality, most purchases are made on two incomes. A ratio of 12 years of individual salary therefore corresponds to roughly 6 years of combined income for a couple on comparable pay.

Other databases, built on user-submitted data, calculate a price-to-household-income ratio on an average property rather than a new build. The results diverge sharply. Amsterdam is the perfect illustration: more than 15 years of gross individual salary for a new 70 square metre flat under the institutional method, but a ratio of 9.4 under the crowdsourced household-income method. Neither figure is wrong. They simply measure different things.

The practical lesson is simple: never compare two ratios drawn from different methodologies. And always check what sits in the denominator before drawing a conclusion about a market.

Average or median salary: why it changes everything

The dominant method uses average salary. That is its main weakness. In a city where a few tens of thousands of very well-paid professionals live alongside a majority of modest earners, the average is pulled upwards and affordability looks better than it really is.

The effect is most visible in financial and technology capitals. Geneva and Zurich post average net salaries above 7,300 and 7,100 euros a month, but those averages conceal widely dispersed pay realities. A service-sector employee there faces far worse affordability than the official ratio suggests.

The median salary, by contrast, is the income that splits the population in two. It describes the typical household far better. In cities with high wage inequality, the gap between the two measures can reach 20 to 30%. In other words, a headline ratio of 10 years of average salary can translate into 12 or 13 years of median salary.

The takeaway: published rankings almost systematically understate the real difficulty of buying in large, unequal metropolitan areas.

The 70 sqm benchmark as a common unit

Standardising on 70 square metres neutralises a major variable: average dwelling size varies enormously between countries. A typical apartment in Copenhagen has nothing in common with a typical apartment in Bucharest, either in floor area or in specification.

This convention comes at an analytical cost, though. In Paris, Amsterdam or London, a new 70 square metre flat is not the entry-level product. Most first-time buyers look at 40 to 55 square metres, often in older stock. The official ratio therefore describes a family home, not the realistic first purchase.

Conversely, in secondary cities in Central Europe or southern Italy, 70 square metres matches the market standard reasonably well. Comparability is therefore better in one direction than the other.

For a rental investor, this distinction matters. The yield on a studio and that on a three-room apartment almost always diverge, with smaller units offering higher gross yields and faster turnover. The years-of-salary ratio says nothing about this level of granularity.

The capital city ranking, from Paris to Brussels

The most recent institutional data places Amsterdam at the top of European unaffordability, at 15.4 years of gross annual salary for a new 70 square metre apartment. Athens follows very closely at 15.3. Prague completes the podium, with the Czech Republic having topped the unaffordability ranking for four consecutive years in the past.

These three cities illustrate three completely different mechanics. Amsterdam suffers from a structural land shortage on a constrained territory, combined with strong international demand. Athens has a denominator problem: with an average net salary of around 1,044 euros a month, among the lowest in Western Europe, even moderate prices produce an extreme ratio. Prague combines a valuation that has decoupled from local incomes with a persistently insufficient supply of new housing.

Below the podium, price-to-household-income ratios reveal a second, highly stretched group. Vienna comes in at 14.7, Munich at 13.5, Zurich and Geneva at 13.2, Lausanne at 11.5. Copenhagen and Helsinki sit around 11.0, Luxembourg at 10.1.

Paris occupies a particular position. The French capital long held the European record for price per square metre, above 13,000 euros in some earlier measurements. But its effort ratio is cushioned by high salary levels and, above all, by some of the lowest borrowing costs on the continent. The average European mortgage rate stands at 4.36%, while France, Belgium, Spain and Luxembourg remain below 3.5%. That difference of more than a percentage point radically transforms the monthly payment for the same purchase price.

Another indicator usefully completes the picture: rent as a share of average salary. London reaches 75%, Madrid 74%, Rome 65%. Paris sits around 45% and Berlin around 40%. This figure measures pressure on tenants, and therefore a landlord's real room for manoeuvre to raise rents without triggering arrears or vacancy. It is also the fastest way to tell a tight rental market from a merely expensive one.

The three least affordable cities in Western Europe

Amsterdam, Vienna and Munich form the group where buying a home has moved beyond the reach of a single earner. Price-to-household-income ratios there reach 9.4, 14.7 and 13.5 under crowdsourced measures, and climb far higher when the institutional new-build method is applied.

These three markets share three characteristics. New supply constrained by land scarcity or restrictive planning rules. Demand sustained by powerful local economies and an inflow of skilled workers. And a deep rental market that absorbs the households priced out of ownership.

That last characteristic is the one that interests investors. A market where buying is unaffordable mechanically produces captive, durable rental demand. Vacancy risk is low. In exchange, gross yields compress, because entry prices have risen far faster than rents.

Vienna adds a constraint of its own: a substantial stock of social and regulated housing that caps rents across a large share of the market and limits repricing potential.

The capitals where six years of earnings still suffice

At the other end of the capital-city spectrum, one group retains ratios around 6. Brussels comes in at 6.0 under crowdsourced household-income measures, The Hague at 6.3, Rotterdam at 6.0.

These figures deserve a cautious reading: they rest on user-submitted data and on an average property, not on a standardised new build. The gap with institutional measures can be significant. But the relative order of magnitude remains informative.

Brussels is a textbook case. The affordability ratio there is three times more favourable than in Prague or Lisbon, the monthly mortgage payment represents around 41% of income, and the Belgian mortgage rate remains below 3.5%. The price-to-rent ratio stands at 17.8 in the city centre and 15.1 outside it, levels that leave real room for yield.

Major Dutch cities outside Amsterdam offer a comparable profile. Rotterdam and The Hague benefit from the same national economic strength and the same rental tension, without carrying the capital's valuation premium.

Secondary cities: when the regions halve the effort

The most striking gap is not between countries, but within them. This is where the European ranking becomes genuinely actionable for an investor.

Germany offers the clearest demonstration. Munich posts a price-to-income ratio of 13.5. Leipzig comes in at 5.8. That is a factor of 2.3 within the same legal framework, the same currency, the same national labour market and the same tax system. In between, Frankfurt and Stuttgart sit around 7.2 and 7.0, Düsseldorf at 9.1, Nuremberg at 7.7, Dresden and Mannheim at 6.1.

The United Kingdom shows the same pattern. Edinburgh reaches 7.8, Newcastle 6.4, Leeds 6.0 and Liverpool 4.9. Manchester, incidentally, ranks among the three most affordable cities in Europe under the institutional measure, at 5.3 years of gross annual salary.

In the Netherlands, the contrast between Amsterdam at 9.4 and Rotterdam at 6.0, The Hague at 6.3, Utrecht at 6.9, Eindhoven at 7.2 and Groningen at 7.6 shows that even a highly stretched country retains pockets of affordability. In Norway, Bergen comes in at 6.7 and Stavanger at 5.8, against considerably higher levels in Oslo. In Belgium, Antwerp at 6.1 and Ghent at 6.1 remain in line with Brussels.

Europe's most affordable cities are, in fact, found outside the capitals. Odense in Denmark and Turin in Italy share first place at 4.9 years of gross annual salary for a new 70 square metre home. This affordability is not the result of a single factor but of a combination: moderate prices, stable incomes and available financing.

The capital-versus-regions divide is documented at national level. In Portugal, prices in Lisbon and Porto have run 164% above the national average. That gap means an investor reasoning at country level is systematically looking at the wrong market. The same logic applies at neighbourhood level, where twenty kilometres can double or halve a rental yield.

One caveat, though: a low ratio is not in itself an opportunity. It can signal a declining population, a fragile economic fabric or high structural vacancy. Leipzig and Manchester combine affordability with dynamism. That is not the case for every cheap secondary city.

An expensive home is not necessarily a bad investment

Intuition suggests that a tight market is a profitable market. The data shows the opposite in most cases. The price-to-income ratio and gross rental yield usually move in opposite directions, for a mechanical reason: price is the denominator of yield.

When prices rise three times faster than rents over a decade, as they did across the EU between 2015 and the end of 2025, gross yields compress structurally. A property bought for 200,000 euros and let for 10,000 euros a year returns 5%. If the price climbs to 300,000 euros and the rent to 11,500 euros, the yield falls to 3.8%. The existing owner grows richer in capital terms; the new entrant buys a degraded yield.

This is exactly what separates a long-standing investor from one entering a stretched market today. A high price-to-income ratio is the symptom of a decade of growth already consumed.

High price-to-income ratio, compressed rental yield

Prague concentrates the worst of both worlds. A price-to-income ratio of 18.9, among the highest in Europe, for a gross rental yield of 2.9% both in the city centre and on the outskirts. The buyer pays an extreme entry price and collects a weak rental stream.

Moscow shows a similar profile, with a ratio of 21.6 for a yield of 3.2%. Germany's stretched major cities follow the same logic: Dresden and Mannheim, despite moderate ratios of 6.1, cap out between 3.3% and 4.5% gross yield, largely because of strict rent controls.

The lesson is clear. A high affordability ratio reflects a valuation that has outrun rents. For an income-focused investor, that is a negative signal, not a mark of quality. Compressed yield can only be recouped through an assumption of future capital gains, which means betting on the rise continuing.

Where the gap between purchase effort and rent creates an opportunity

The interesting markets are those combining a moderate affordability ratio with a high rental yield. Brussels is the clearest example: a price-to-income ratio of 6.0, gross rental yields of 5.6% in the city centre and 6.6% outside it, with borrowing costs below 3.5%.

Leeds goes further still, with an identical ratio of 6.0 for a gross yield reaching 7.7% in the city centre, the highest in the sample. The Hague offers 6.1% in the centre and 6.8% outside for a ratio of 6.0. Antwerp comes in at 4.9% and 5.9% for a ratio of 6.1.

Lisbon is the exception worth watching: a very high price-to-income ratio of 19.7, but still a decent yield of 4.8% in the centre and 5.8% outside. This profile signals a market driven by external rental demand, tourist and expatriate, which supports rents independently of local incomes. It is also the profile most exposed to regulatory risk.

Lille illustrates an intermediate French case: a ratio of 6.1, yields of 4.3% in the centre and 5.0% outside, with a monthly mortgage payment representing 43.8% of income.

Three signals to watch before choosing a market

First signal: the gap between price growth and rent growth. When prices accelerate significantly faster than rents over several years, future yields deteriorate and the investor is buying hoped-for capital gains rather than income. Over the past decade, Hungary posts +290% on prices against +109% on rents, Portugal +180% on prices, Lithuania +168% against +88% on rents. Rents rose in all 27 EU countries, but everywhere more slowly than prices.

Second signal: the local cost of credit. A one-point difference in rates profoundly alters the equation. The average European mortgage rate sits at 4.36%, but Bulgaria drops to 2.83%, Croatia to 2.86%, Turkey to 3.01%, while France, Belgium, Spain and Luxembourg remain below 3.5%. The ongoing monetary easing supports demand, and therefore prices. In other words, the number of salaries needed to buy is more likely to rise than fall in the short term.

Third signal: regulatory risk. Housing has become an unprecedented European political priority, with a dedicated commissioner and a specific task force. The affordable housing plan rests on four pillars: increasing supply by simplifying procedures, mobilising more public and private investment, adapting state aid rules to finance social housing, and strengthening protection for vulnerable groups.

Short-term rental regulation is the strand most directly sensitive for investors. Draft legislation aims to give cities the tools to control platforms in high-pressure areas. The context justifies it: the main platforms recorded 854.1 million booked nights in 2024, up 18.8% year on year, with activity up 93% since 2018.

This primarily concerns markets whose yields depend on seasonal letting: Lisbon, Athens and Prague in particular. A profitability model built on short-term rentals now carries a regulatory risk that must be priced in from the outset, alongside the price-to-income ratio and the gross yield.

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