The housing market is subject to various housing and social state policies that affect people’s decisions about buying a house. Moreover, the market is also closely related to the banking sector and its lending activity, considering that most of the investments in immovable properties are made through loans, thus changes to the interest rate can have an impact on the entire construction sector. On the other side, changes to the price of immovable properties have a key role in the decisions taken by central banks all over the world. So, these two sectors depend on each other and influence each other.
Nowadays, there are a lot of people who are looking for a country where to maximize investments in immovable property. Buying a property in another country is not a simple process and also it is necessary to be informed about the real estate market and the country in general. In this work, we are going to analyse the real estate market and finding the 10 most expensive countries in the world to buy a property.
If we consider the price to income ratio, the most expensive country in the world is Serbia, where are necessary 133.3 years to buy an apartment. Syria is in the second place with 60.8 years, followed by Hong Kong with 47.5 years.
|Rank||Country||Price to Income|
If we consider price to rent ratio of the city centre, the most expensive country in the world is Taiwan, followed by South Korea and China.
|Rank||Country||Price to Rent City Centre|
If we consider price to rent ratio outside the city centre, the most expensive country in the world is Taiwan, followed by South Korea and Hong Kong.
|Rank||Country||Price to Rent Outside of City Centre|
If we consider the mortgage as percentage of income, the most expensive country in the world is Venezuela where the mortgage payment is about 3025% of the incomes. Argentina is in the second place with 1041.2%, followed by Syria with 662.8%.
|Rank||Country||Mortgage as a Percentage of Income|
Finally, it is recalled that there could be many occasions to buy an apartment at discount price when the real estate market is overvalued and not only when it is overvalued. In addition, that could be many expensive apartments despite the real estate market is undervalued.
About the data used in this work
Real estate market analysis is made considering an apartment of 90 square meters which price per square meter is the average of price in the city centre and outside of city centre. The indicators used are:
- Price to income ratio. It is calculated by dividing apartment price to median familial disposable income for a year. Lower value is better.
- Price to rent ratio. It is calculated by dividing the apartment price to the received rent income or the estimated rent that would be paid if renting. Lower values suggest that it is better to buy rather than rent, and higher values suggest that it is better to rent rather than buy.
- Mortgage as percentage of income. It is calculated by dividing the monthly cost of the mortgage to take-home family income. Lower value is better.
The data used in this work are provided by Numbeo and are relating to 2020.