Lisbon Surpasses Tel Aviv as Europe’s Most Expensive City to Buy a Home
A recent comprehensive analysis of housing affordability across 16 European countries reveals that Tel Aviv, long ranked as the most expensive city for purchasing a home in Europe, has dropped to fourth place. The study calculated the number of gross monthly salaries required to buy a 100-square-meter apartment, using official statistics, central bank price indices, and real estate registries.
Lisbon now tops the list, requiring 375 gross monthly salaries, equivalent to over 31 years of work, to afford a similar apartment priced at approximately $887,000. This surge is driven by a 17.6% annual price increase amid a relatively low average monthly salary of 2,068 euros. Prague and Zurich follow, demanding 338 and 332 salaries respectively, with Zurich’s high prices offset by the highest average European salary of around $9,000 per month.
Tel Aviv requires 299 gross salaries, about 25 years of work, for a 100-square-meter apartment priced at roughly 4.3 million shekels. Despite its high prices, Tel Aviv’s ranking fell due to faster price increases elsewhere. Budapest and Athens also rank high due to low average wages combined with strong local and foreign demand.
At the other end, cities like Brussels, Copenhagen, and Dublin show much better affordability, requiring fewer than 120 salaries, thanks to higher wages and moderate property prices. The report notes a broader European trend of rising housing prices, with a 5.5% increase forecast for 2025, led by Hungary, Portugal, Spain, and the Netherlands, while some markets like London and Warsaw are experiencing declines.
In Tel Aviv, despite official statistics indicating continued price rises, tax authority data suggests a slight 2% price drop in the past year. The average monthly mortgage repayment for a four-room apartment in Tel Aviv is 16,782 shekels, significantly above the national average salary, making homeownership unaffordable for many. However, lower mortgage interest rates have slightly eased monthly payments. Real estate experts highlight a growing gap between asking prices and final sale prices, creating uncertainty for buyers and sellers alike. The current market offers more negotiation power and options for buyers with available capital, a rare opportunity not seen in years.
