The Burrow
Mar 12, 2025
Housing is a fundamental need that humans need to survive and thrive, but as it becomes more expensive to rent and buy homes, there’s been an increase in stress when trying to find affordable ways to put a roof over our heads. This is a problem affecting the global economy, as nearly every major country has reported issues with stressed first-time buyers and dissatisfied renters.
As home loan comparison experts helping Australians settle into a new home, we researched various cities around the world to find out how affordable housing is in different countries, letting us find out where the most stressful and least stressful places to buy a home are. Our data monitored factors such as house size, mortgage interest rates, average incomes, and more. By ranking our findings on an index, we were able to find the most affordable (and least affordable) countries for housing.
Understanding your nation’s housing market is key to making sure you’re paying the right amount for a home. Here’s what we found, when researching global housing affordability.
While affordable housing stress is common all around the world, the differences in markets from country to country are still clear to see.
Mortgage interest rates are one of the biggest variations between regional markets. For instance, according to our research, Japan has the lowest interest rates, which have just a 1.83% yearly increase for a fixed-rate 20-year mortgage. Meanwhile, Argentina has the highest rates, with a massive 75.46% increase for the same period.
Among the top and middle-ranked countries on our list, the Philippines had the most expensive mortgages when compared to the country’s average salary. This mortgage cost-to-income ratio shows how difficult housing is to afford for a typical worker, with the typical mortgage in the Philippines costing 268.4% more than the usual wage.
When indexing each country with a score based on their housing affordability, Nigeria was ranked as the hardest country to afford housing in, with its score of 93.6 being the highest in our data. On the other hand, Belgium scored only 8.3, making its housing market the most affordable that we analysed.
Compared to the rest of the world, Western Europe tends to have lower mortgage interest rates, with moderate cost-to-income ratios that suggest mostly stable housing markets.
There’s still variation between countries despite a relatively moderate market. Belgium ranks as the world’s most affordable country for housing, with the average mortgage costing just 53.35% of a typical salary – and mortgage interest rates of only 3.62%. Close behind are Finland and Luxembourg, which both offer great value for money. Incidentally, Finland records a low average household size of 1.93 residents, making for a lower cost per person, while Luxembourg’s interest rates stand at just 3.14%.
Meanwhile, countries like Portugal and Italy are more likely to have unstable markets, with Portugal in particular having the highest mortgage cost-to-income ratio in the west of Europe (a mortgage costs 132% of the average salary). The United Kingdom has a significantly higher average mortgage interest rate than other western European countries, standing at an 5.78% annual increase.
Interest rates in Eastern European countries tend to be higher than those in the west, with mortgage-to-income ratios also showing a trend of less affordable housing. This data suggests a relatively unstable housing market, with space for growth available. Some of the worst affected countries in eastern Europe are Belarus, with a cost-to-income ratio of 170.6%, and Moldova (141.1%).
North American countries like Canada and the United States typically have moderate interest rates (6.64% and 6.57% respectively) and incomes that make for relatively affordable mortgages. However, there’s large amounts of regional variation, especially with major urban hubs in these countries costing much more than the national average. This in turns leads to high affordability pressure, with young people and first-time buyers struggling to enter the market.
South American countries rank as some of the toughest for housing affordability on our index. Argentina is of particular note, with a high interest rate of 75.46% and a cost-to-income ratio of 1,332%, making it the worst ranking country for both of these factors. Other countries in South America that rank towards the bottom of our index include Venezuela, with a 414.5% mortgage cost-to-income ratio, and Colombia, with a ratio of 294.3%.
Countries in Oceania have high mortgage-to-income ratios, making for plenty of potential affordability issues. Despite this, the region has moderate interest rates for mortgages, meaning these prices aren’t likely to fluctuate. New Zealand in particular shows difficulties surrounding housing affordability. Its mortgages typically cost roughly 95% of a New Zealander’s income, with an average household size of 2.62.
Asia’s housing market is mostly categorised by costly mortgages compared to average incomes, but with low interest rates. For example, although Japan boasts the world’s lowest mortgage interest rates at a staggering 1.43%, it ranks poorly for housing affordability due to a high cost-to-income ratio of 95.1%. The most affordable country for housing in Asia that we investigated was Taiwan, which scored 34.60
Some of the least affordable countries we analysed include Iran and Türkiye, with shockingly high cost ratios of 809.1% and 409.34% respectively. Other Middle Eastern countries such as UAE and Saudi Arabia appear to be more affordable, with mortgage interest rates of around 4.6% and 4.7%, but these are offset by large household sizes of more than six residents each on average.
With the United States being one of the biggest and most varied countries in the world, its housing market is hard to summarise on a national scale. Overall, though, it has an average mortgage interest rate of 6.57% annually on a 20-year fixed-rate plan. The typical household is home to 2.52 people, while mortgages cost 37.70% of the country’s average income. Although this ratio is low for now, a high rate of mortgage interest suggests that house prices are likely to worsen over time.
The average mortgage interest rate across Australia stands at 6.38%, making for a slightly smaller annual increase when compared to America’s fixed-term 20-year rates. Australian households are slightly larger, though, with 2.55 typical residents.
Australia’s main difference compared to America is its lower average salary, meaning its cost-to-income ratio is much higher; a typical Australian mortgage costs 74.67% of an income, making it a difficult region for housing affordability.
The housing market varies greatly depending on what region of the world you’re looking to buy or rent in, but struggles with affordability are a universal experience when it comes to getting on the property ladder. Understanding the market in your area is important to finding the best deals on your property, and making sure you can budget for a move accordingly.
Compare the Market’s General Manager of Money, Steven Zeller, said amid financial cost-of-living concerns, there are still ways to enter the property market within a budget.
“Stress when trying to find affordable housing is a common feeling for almost every homebuyer, but understanding your options can help you ease into the property market,” Mr Zeller said.
“Utilise tools such as a borrowing power calculator, know your credit score and get property profile reports to help understand the market – while talking to a home loan specialist can help you navigate through the journey and ensure you’re on a competitive home loan rate.
“Consider cheaper and smaller properties in areas that have potential growth to reduce your mortgage size and comparing your home loan options can help reduce the barrier to home ownership.”
This study is made up of three metrics, each provides a foundational comparison point linked to house affordability/value for money. The metrics and sources are as follows:
Using the collected data points we created an affordability index for each country based on the following logic:
Countries were assigned a score out of 100 (lower is better) based on the combined metrics of mortgage affordability, household size, and interest rates. Those with a lower cost-to-income ratio, fewer people per household, and lower interest rates were classified as more affordable and offering better value for money.