Renting in big cities

Posted on Aug 20, 2017

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Kuala Lumpur ranks as the most rent-affordable place in the world


WHEN it comes to renting, Malaysians may be surprised that our capital city Kuala Lumpur has actually been crowned as the most affordable city in the world, according to a report by RENTCafé.com.

Although most people would say that it's expensive to rent a house or even a room in Kuala Lumpur, studies actually tell a different story.

Research by PwC and others on the living standards of various cities reveal that Kuala Lumpur is the most rent affordable city by estimating the ratio of average rental cost in comparison to the average household income, which suggests that only 20% of its dwellers’ income is spent on rental.

While renters in Malaysia can take comfort with this finding, it is worth looking at the other international cities to determine the difference in rental standards in those regions or countries.

Berlin: Where history meets rent control

According to Trading Economics, German home ownership rate ranks among the lowest in the developed world, with an average of 52.89% from 2005 until 2015. Most Germans prefer to rent these days, but the unique situation in Germany arises from historical circumstances way back in the 1930s and 1940s. After World War II, war-torn Germany was in need of millions of housing units, which were supplied by vigorous government action. The robust housing regulations have extended to the rental market, and the state governments can cap rent increases to no more than 15% over a three-year period.

According to, Berlin is ranked as the 12th most affordable city with a rent-to-income ratio of 30%, making it one of the western European cities that made it to the upper part of the list.


Mexico City: The story of high rent

Mexico City barely cracked the top 10 when it comes to average rent per year. In fact, it is at the bottom of the list for average rental value. However, at an average of US$8,640 (about RM28,130) per year, it is no small burden to its residents who have a median household income of US$14,500 (RM62,300) per year, taking up more than half their income.

London: No big dent for Big Ben

Brexit may have cast a dark cloud over the United Kingdom and played a part in the recent drop in average annual rents of Central London and Greater London at 1% and 4.7% respectively. This has come after years of rises in rental rates, placing London as one of the most rent-burdened cities and taking up 40% of its average citizen’s income.

Singapore: Iconic public housing policy

According to Housing and Development Board (HDB) statistics, 82% of the resident population live in lease accommodation – thanks to the provision of HDB flats sold on a 99-year lease agreement in Singapore. It's no small feat for a small city state with scant land resources.
Despite having the highest median household income among the 30 listed cities, Singaporeans fare less satisfactory with 44% of their income being cashed out for rental fees, putting the city at the lower part of the list at 25th position.

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