The Cost of Rent Index

How does rent compare to the cost of living around the world?

When you take into account monthly spending such as groceries, running a car, bills, looking after a family as well as treating yourself now and then, the cost of living can really start to add up. 

The single biggest cost that most of us face is either a mortgage or monthly rent payments, to help you can compare current accounts to find the right deal for you.

But how does the cost of rent compare to the many other costs in our lives? And how does this vary around the world? 

If you’re considering whether you should rent or buy a home, here are the benefits of each to help you decide whether to rent or buy.

We’ve looked at the average cost of rent for a three-bed property in over 50 countries around the world and compared it to the cost of living for a family of four, including food shopping, utilities, transportation, leisure and more. 

*Note that we’ve studied ‘developed’ nations according to the United Nations’ Human Development Index. 

The countries spending the highest % of essential monthly outgoings on rent

1. Hong Kong - 50.25%

Average monthly rent (three bedrooms): £2,760

Family of four estimated monthly living costs: £2,732

Total monthly outgoings: £5,492

Rent as % of total monthly outgoings: 50.25%

Hong Kong is the only country on our list where the average person pays more for their rent than their living costs combined. The average three-bed property costs an average of £2,760 per month. That’s more or less equal to the monthly cost of looking after a family of four, which clocks in at £2,732 on average.

2. Singapore - 47.08%

Average monthly rent (three bedrooms): £2,253

Family of four estimated monthly living costs: £2,532

Total monthly outgoings: £4,785

Rent as % of total monthly spending: 47.08%

Another small country in the East takes second place, Singapore, where the average rent takes up 47.08% of average expenditure. Again, it’s a nation well-known for its high cost of living and is also popular with expats from around the world, but if you’re planning on living here then you’ll certainly want to be aware of the potential costs!

3. Qatar - 43.73%

Average monthly rent (three bedrooms): £1,705

Family of four estimated monthly living costs: £2,194

Total monthly outgoings: £3,899

Rent as % of total monthly spending: 43.73%

In third place is Qatar, where the average rent is £1,705, and while this is around a quarter lower than in Singapore, it still makes up 43.73% of the average monthly expenditure. 

The countries spending the lowest % of essential monthly outgoings on rent

1. Saudi Arabia - 19.07%

Average monthly rent (three bedrooms): £424

Family of four estimated monthly living costs: £1,799

Total monthly outgoings: £2,223

Rent as % of total monthly spending: 19.07%

The country where rent payments will take up the smallest percentage of your finances is Saudi Arabia. Here, the average rent stands at £424, while the estimated cost of living adds up to £1,799, with rent therefore occupying just under a fifth of monthly outgoings.

2. Greece - 19.73%

Average monthly rent (three bedrooms): £451

Family of four estimated monthly living costs: £1,835

Total monthly outgoings: £2,286

Rent as % of total monthly spending: 19.73%

The European country with the lowest rent compared to cost of living is Greece, with rent taking up 19.73% of the average monthly expenditure. The average rent for a three-bed property here is £451, while other costs such as food, transport and clothing come to £1,835.

3. Turkey - 20.11%

Average monthly rent (three bedrooms): £249

Family of four estimated monthly living costs: £989

Total monthly outgoings: £1,238

Rent as % of total monthly spending: 20.11%

The rent for Greece’s neighbour Turkey stands at a similar percentage, at 20.11%, but it also had the cheapest rent and average cost of living expenses out of any country that we looked at, at £249 and £989 respectively.

The countries spending the highest % of income on rent

1. Azerbaijan - 71.49%

Average monthly rent (three bedrooms): £317

Average monthly household income: £444

Rent as % of household income: 71.49%

We also looked at how average rents stack up with earnings around the world and the nation where rent makes up the biggest percentage of income (by some distance) was Azerbaijan. The average rent in this country on the border between Europe and Asia is fairly low, at £317 per month, but with a monthly household income of just £444, 71.49% of income is spent on rent.

2. Hong Kong - 65.80%

Average monthly rent (three bedrooms): £2,760

Average monthly household income: £4,195

Rent as % of household income: 65.80%

Rent takes up a large percentage of the average earnings in Hong Kong, which is to be expected with average rent prices as high as £2,760 per month. Although earnings are also high, at £4,195 per month for a household, this still means that rent takes up 65.80% of the household’s income.

3. Malta - 58.83%

Average monthly rent (three bedrooms): £1,115

Average monthly household income: £1,896

Rent as % of household income: 58.83%

The Mediterranean island of Malta has the third-highest rent compared to income, with rent taking up 58.83% of the average household income. While rent in Malta is relatively expensive at an average of £1,115 a month, earnings don’t quite match up, at £1,896 per household per month.

The most expensive countries to rent a three-bed property

1. Hong Kong - £2,760 per month

When it comes to renting a three-bed property, the most expensive of the countries that we looked at was Hong Kong, with an average monthly rent of £2,760. A densely populated nation with seven and a half million people squeezed into just 1,110 square kilometres, demand for housing is high in Hong Kong, which probably goes some way to explaining these sky-high prices!

2. Singapore - £2,253 per month

It’s a similar situation in Singapore, where rent costs, on average, £2,253. Singapore is another very densely populated country with land for new buildings at a premium. Many locals live in government HDB flats which offer a slightly more affordable route into the rental market.

3. Switzerland - £1,900 per month

Switzerland is known for its expensive cost of living (estimated at around £4,228 a month for a family of four), and the expensive cost of buying property means that many choose to rent instead. However, renting is clearly an expensive option too, with average monthly rent standing at around £1,900.