At this point, you might be wondering, why are U.S. cities so darn expensive to live in? Well, the reality is that home prices are rising around the world, and the cost of living is getting higher both within and outside the U.S. On that note, we wanted to see how the biggest cities in America compared to other cities across the globe, to get a better picture of the situation.
To start and select our list of cities, we turned to A.T. Kearney’s 2019 Global Cities Index, which ranks the most thriving cities in the world based on a variety of metrics, including business activity, human capital, cultural experience, and more. We selected the top 50 cities in their latest ranking and looked at how much space you could rent in each of them for $1,500 per month, based on the average rent of a one-bedroom apartment. We then looked back to see if the amount of square footage you get in these cities for $1,500 has changed from 5 years ago - do you get more or less space for your buck?
To further reveal the differences across the globe, we used the data to get the average rent price per square foot in each city, to extract the 10 priciest and the 10 least expensive cities to live in right now. Here’s what we found.
Want to Enjoy Lots of Living Space? Then You Shouldn’t Move to San Fran or New York
Combining A.T. Kearney’s ranking of the top 50 global cities with data from Numbeo, we get a much better idea of just how expensive American cities are for renters. Based on the average rent for a one-bedroom apartment, 6 of the priciest 10 cities in the world are located in the U.S. However, New York is not the priciest; San Francisco takes the top spot, with an average rent per square foot of $5.75. This means that you only get 261 square feet for $1,500 a month in San Fran, which is not a lot of bang for your buck. In NYC, you get 289 square feet, followed by Boston with 353 and Washington, D.C., with 386. Check out the full list below:
The priciest city to live in outside the U.S. is Hong Kong, where $1,500 will get you a mere 400 square feet of rental space. The Chinese metropolis is the world’s fifth-priciest city to rent in, and also fifth on the 2019 Global Cities Index. It’s been holding steady at #5 in A.T. Kearney’s ranking for 7 years now, and its constant growth and evolution is pushing home prices up, as well.
New York City is, once again, the #1 global city in the world, according to the report. However, it’s no longer the priciest city to rent in, having been surpassed by San Francisco in this respect. The California city has become the main tech and innovation hub on the West Coast, and the surging supply in high-paying tech jobs has led to a surge in home prices and rents. The average price of a single-family home here is nearly $1.5 million in 2019, and one-bedroom apartments command close to $900,000. What’s more, it would take a whopping 81 years to save up for a full home payment in San Fran, without putting aside more than 30% of your monthly income. New York isn’t exactly cheap, either, and it would take you 35 years to be able to buy a home without any mortgage payments.
$1.5K per Month Rents You 261 Square Feet in San Francisco and 3,308 Square Feet in Buenos Aires in 2019
It’s no wonder that so many people prefer to rent or go for options like coliving these days. The bad news is that rents are also sky-high in these major global cities, and they’re still rising. If you do want to live in one of these cities, and there are many advantages to doing so, you need to be ready to give up on personal space and other fancy amenities, because $1,500 per month won’t get you a lot of space in these places. However, that same amount can rent you a lot more space in cities outside the U.S., so you might want to consider moving abroad. Check out the visual below to see what we mean:
Now the differences between the top 50 global cities become more obvious. San Francisco and Buenos Aires are on opposite ends of the spectrum: the former offers you just 261 square feet of rentable space for $1,500 per month, while the latter offers 3,308 square feet - 12 times more bang for your buck. The average size of a San Francisco apartment is just 737 square feet, so that’s a pretty massive difference.
What if we were to compare the priciest and the least expensive U.S. cities on our list? The least expensive cities to rent in, based on our ranking, are Dallas and Houston, where $1,500 a month will get you 626 square feet of living space. That’s still well below what cities outside the U.S. have to offer, and as it turns out, the two Texas cities are pricier than Paris, Rome, Melbourne, Tokyo, Montreal, and Beijing, among many others. So maybe living in the U.S. is more costly than anywhere else in the world, after all.
What Did $1.5K Rent You in These Cities 5 Years Ago?
We know that the real estate market works in cycles, and it has its ups and downs. In some places, home prices and rents continue to climb, sustained by a strong economy and an influx of tech-savvy Millennials, while the cities they leave behind become slightly more affordable. We were curious to see if you got more or less space for the same amount of $1,500 today compared to 5 years ago. Lots of things can change in 5 years, and comparisons like these can reveal some interesting trends. Those who are planning to move to another city in the near future will want to know what to expect in terms of housing costs. Will they have to downsize in a few years due to rising rents, or will they get more space for their budget?
Things have indeed changed over the past five years, but in different ways for different cities. In some places like Buenos Aires, Istanbul or Sao Paulo, $1,500 will rent you a lot more space today than it did in 2014. In the Argentinian capital, for example, you get an additional 1,644 square feet in 2019. To put that into perspective, the average apartment in Manhattan is a little over 700 square feet in size, so that’s a lot of extra living space.
Check out below the 10 Global Cities where you get a lot more rentable space than you did 5 years ago:
Now, let’s look at the other end of the spectrum. Some of our 50 Global Cities actually offer a lot less space for $1,500 in 2019 compared to 2014. Dallas and Prague are the cities where you’ll be downsizing the most, as you get 255 square feet less than you did 5 years ago. In Dallas, $1,500 rented you 881 square feet in 2014, which isn’t a lot of space to begin with, if you ask us. However, in 2019, that same amount will get you just 626 square feet. That doesn’t sound like a lot, but it’s worth noting that it’s the most space you’ll get for $1,500 in any of the U.S. cities on our list.
Check out 10 Global Cities where you get a lot less space in 2019 compared to 2014:
The 10 Priciest Vs. the 10 Least Expensive Global Cities in 2019
To dig deeper and get an even clearer picture of the current situation, we used the data to calculate the rent per square foot for each city on our list, and then extracted the 10 priciest and the 10 least expensive locations at the moment. Seeing the numbers represented this way is a big reality check, as the differences between the cities become even more obvious. The cities colored in red are the most expensive locations in the Global Cities ranking, while the ones colored in green are the least expensive:
In San Francisco, the average rent per square foot is $5.75, making it the priciest city in the world for renters. New York City isn’t far behind, with $5.20 per rentable square foot, followed by Boston with $4.25 and Washington, D.C., with $3.88. The top 5 is completed by Hong Kong, commanding $3.75 per square foot, followed by another 2 U.S. cities, namely Los Angeles and Seattle. London, which is the second most magnetic city in the world, coming in at #2 on A.T. Kearney’s ranking, is only the 8th most expensive city to rent in. The top 10 closed with Geneva at #9 and Singapore at #10.
Unsurprisingly, there are no American cities on our list of the ten least expensive destinations for renters. The most affordable city in the top 50 is the Argentinian capital, Buenos Aires, where the average rent per square foot is $0.45. Istanbul follows close with a rental rate of $0.54 per square foot, as does Sao Paolo, with $0.86 per square foot. The only European city to make this top 10 is Prague, where the average rent per square foot is $1.36. This makes the Czech Republic capital the most affordable European global city to live in in 2019.
Methodology
We used the A.T. Kearney 2019 Global Cities Index to extract the 50 most thriving cities in the world at the moment. With the help of Numbeo data, we calculated the average rent for a one-bedroom apartment, using a standard apartment size (600 square feet/56 square meters). We then calculated the rent price per square foot for each city and used it to obtain the total square footage you would get for $1,500. Numbeo data was also used to compare the 2019 figures to those from 2014.