The report released by RENTCafé, a
property search website puts Lagos rent at $355 (N129, 575) per month while the
household income is $625 (N228, 125), making the city the third behind
Manhattan, New York City with 59 percent and Mexico City with 60 percent.
It also identified the three least cities as
vibrant urban hubs with thriving or emerging economies but unaffordable for
renters
The ranking is coming on heels of the global
professional services firm, Price Water Corporation (Pwc) Opportunity report
that listed Lagos at 28 position of 30 cities.
In its latest Cities of Opportunity report, PwC
has also set up what is basically the shortlist of the world’s best cities to
work and live in.
The top-30 ranking is the result of an in-depth
analysis of the most prosperous global business, finance and culture capitals,
which looks at 10 different indicators—including but not limited to
infrastructure, intellectual capital, sustainability and ease of doing
business, all of them essential for a great environment.
With the list, the researchers looked at how much
money do people earn in these cities and whether these salaries are enough to
afford a rental apartment.
The implication of the recent report is renters
in Mexico City, Manhattan and Lagos face severe rent burden, meaning that the
rent takes up more than half of a household’s income each month (60 per cent,
59per cent and 57per cent respectively).
In other words, in an average family with two
earners, one of them works only to pay the rent, and it’s still not enough.
Lagos residents cough out an astounding 57per
cent of their income on rent, while in Mexico City, the median household income
barely hits the $14,500 mark and yearly rent amounts to $8,640 on avg.
That puts Mexico City first among the world’s
most unaffordable cities for renters with a 60per cent rent burden. Not even
London, which PwC declared the world’s best city to live and work in escapes
the affordability woes.
The 40per cent rent-to-income ratio places UK’s
largest city among the moderately rent-burdened global powerhouses of the
world.
At the other end of the spectrum, Kuala Lumpur
emerges as the best choice for renters in search of more relaxed lifestyles.
Rent barely takes 20per cent of the median household income in Malaysia’s
capital city.
In the study, the researchers looked at the
current rents in the top global financial centres, but not restricted to cities
with outstanding activity in the financial sector, and bringing into the
equation the affordability of local housing prices too.
According to the Communications Specialist for
RENTCafé, Amalia Otet, researchers used the list of the world’s top cities of
opportunity as published in the latest issue of their Cities of Opportunity
report and study the overall average rents or their US Dollar equivalents
adjusted for inflation as necessary.
In the report, London slide back 21 places when
ranked by rental affordability, with the seven out of the top 10 most
affordable cities of opportunity catapulted straight from the lower third of
the initial ranking.
“London is famously expensive. And so is LA. But
is this just an outside perception or the sad reality? Our research team here
at RENTCafé looked at rental prices in the world’s 30 best cities to live in
and compared them with the local median incomes to see just hom (un)affordable
these fine urban hotspots are”, Otet noted.
According to the study, Kuala Lumpur, Moscow, and
Johannesburg ranked as the most affordable cities of opportunity from the 20th,
22nd and 24th places of the original ranking, respectively.
Also, two South American markets on the 4th and
5th places, Bogotá and Rio de Janeiro moved the farthest from their original
positions—22 places up from 26th and 27th.
Speaking on the ranking, an urban development
expert, Lookman Oshodi said the ranking is not unexpected considering spiraling
inflation that the country has witnessed in the past few years.
He noted that in the past two years, however,
most property owners have maintained rent freeze.
Despite the freeze on the real rent cost,
property owners and renters alike, Oshodi said have been dealing with costs
ranging from security, energy, water and road among other housing-related
services.
“The energy crisis has further pushed housing
related cost to astronomical level as residents need to fuel and repair their
power systems,” he added.
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