The cost of a starter home depends a lot on the area it’s in and whether the country is considered wealthy or not. The annual income of the people of a country is a good predictor of what the average home will cost. However, there’s a lot of variation from country to country.
Creditnews Research has calculated the number of years of PPP-adjusted income that homebuyers need to purchase a “globally benchmarked” starter homes across OECD countries with populations of at least 5 million people.
Several times the amount of the average income is generally needed to buy a starter home. According to Creditnews, here’s how several countries stack up regarding starter home affordability.
United States
In the U.S., the average price of a starter home is about $287,900. This is highly affordable when you look at many other countries. With an average salary of $77,463, a starter home will cost 3.7 years of income.
Australia
In the Land Down Under, the starter homes aren’t quite as affordable. The annual salary is $59,408, and the average price for a starter house is a whopping $458,800. This requires 7.7 years of income to buy.
Belgium
In Belgium, salaries are high and housing prices are low. With starter homes averaging $227,000 and salaries averaging $64,848, it takes only 3.5 years of income to buy a home.
Canada
Canada’s housing market has gotten much more expensive over the last few years. It takes 7 years of earning the average salary of $59,050 to afford the average starter home price of $414,700.
Chile
The average salary in Chile is $33,042, but the price of starter homes is just $131,200. It takes the average Chilean four years of salary to buy a starter home.
Colombia
Even with an average salary of just $22,248 a year, Colombians can generally afford a starter home. The average price of one is only $86,600. This costs about 3.9 years of salary.
Costa Rica
Costa Rica is a popular place for vacation homes, partly because they are so inexpensive. The average salary is $31,118, and starter homes are an average of $118,500. This is just 3.8 years of salary.
Denmark
It’s a little harder to get a starter home in Denmark. The average salary is $64,127, and a starter home averages at $331,200. It takes the Danes 5.2 years of salary to afford one.
Finland
It takes a while to be able to afford a Finnish home. The salaries are mid-range at $51,836, but average home prices are $345,300. This requires 6.7 years of salary to afford a starter home.
France
Getting a starter home in France can be tough. It takes 7.1 years of salary to be able to afford one. The average salary is $52,764, and the average starter home is $375,000.
Germany
Housing costs are high in Germany with an average price of $417,900. The average salary is mid-range at $58,940. This requires 7.1 years of salary for a starter home.
Greece
This country has low salaries but also low starter home prices. The average salary is $25,979, and starter homes average $142,900. It requires about 5.5 years of salary to afford one.
Japan
It takes quite a few years of salary to buy a starter home in Japan. Because salaries are just $41,509, and housing prices are $319,000, it takes several years of salary to buy one.
Switzerland
Switzerland has the highest home prices on the list as well as the longest earning time needed to afford one. Salaries average $72,993, but average starter homes are $983,800. This requires 13.5 years of salary to afford.
Turkey
In Turkey, it doesn’t take long to be able to afford a starter home. Salaries average at $31,768, and homes are highly affordable at $84,200. This requires about 2.7 years of income to buy one.
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