Tel Aviv is no longer in first place: this is the city in Europe where it is hardest to buy an apartment

A salaried employee in Israel is currently required to allocate 299 gross salaries, about 25 years of work, to purchase a 100-square-meter apartment in Tel Aviv. The price of a 3.5-room apartment in the city is estimated at about 4.3 million shekels, compared to an average salary of 14,374 shekels per month. However, a comprehensive analysis of data from 16 countries points to a change: Tel Aviv, which has ranked first in European housing cost indices for years, is now in fourth place. Three cities showed a higher ratio due to rapid price increases.

The data is based on a check we conducted recently, in which data from the statistical bureaus of various countries were examined in depth and cross-referenced with price indices of central banks and land registries in Europe. The number of salaries was calculated as the price of a 100-square-meter apartment divided by the average monthly gross salary in each country.

At the top of the ranking is Lisbon: 375 salaries are required, more than 31 years of work. Apartment prices in Portugal rose by 17.6% in the past year, among the most prominent increases in Europe, while the local salary stands at 2,068 euros gross per month. A 100-square-meter apartment in Lisbon costs about 887 thousand dollars.

In second place is Prague, with 338 salaries, due to a price increase of 10.4% in the Czech Republic. Third is Zurich, with 332 salaries: the salary in Switzerland is the highest in Europe, about 9,000 dollars per month, but transaction prices in the city reach about 30 thousand dollars per square meter, the highest figure on the continent, and the price of a 100-square-meter apartment exceeds 2.9 million dollars.

After Tel Aviv in the ranking are Budapest, which requires 297 salaries, and Athens with 291 salaries. The common characteristic in these cities is based on a low average salary, against local and foreign demand that supports high price levels.

At the bottom of the ranking, the situation is different. In Brussels, 93 salaries are required to purchase a 100-square-meter apartment, less than eight years of work. In Copenhagen and Dublin, the ratio is 118 salaries. The existing gap stems from a high monthly salary, ranging from 5,700 to 6,800 dollars, and moderate property prices. Also in Berlin, 183 salaries are required for a new apartment, and about 120 in the second-hand market.

This trend reflects changes in the European real estate market. Interest rate cuts by the European Central Bank increased buyer activity after two years of slowdown, but supply remains lower than demand. Apartment prices in the EU rose by 5.5% in 2025, compared to 3.4% in 2024. The increases were led by Hungary with 18.3%, Portugal, Spain with 12.9%, and the Netherlands with 8.6%.

However, some markets recorded an opposite trend. London showed an annual decline of 2.1%, which represents nine consecutive months of declines, although 223 salaries are still required for an apartment in the city. Warsaw, which recorded the highest price increases in Europe for two years, moved to a downward trend of 0.8%, for the first time in Poland since 2013. Finland stands out as the only country in the EU where prices are falling for the third consecutive year, and in Helsinki, only 146 salaries are required.

The Israeli figure is accompanied by information gaps. While the Central Bureau of Statistics index points to a continued trend of rising prices, an analysis by the Tax Authority published in February shows that prices in the Tel Aviv district fell by about 2% in the past year. The CBS measurement method was criticized by the Ministry of Finance and the Bank of Israel, but the figure appearing in the table is based on the official publication.

The overall picture in 2026 points to a significant gap between earnings and housing prices, which is evident mainly in the capitals of Southern and Eastern Europe. At the same time, in Western countries, there is higher accessibility to real estate purchases for average salaried employees. Tel Aviv's data reflects an intermediate situation: housing prices there correspond to price levels in Western Europe, while the average salary is parallel to the southern regions.

Data from the Alrov Institute for Real Estate Research at Tel Aviv University illustrate the cash flow significance of prices in the city. The monthly repayment required to purchase an average 4-room apartment in Tel Aviv, assuming 30% equity, stood at 16,782 shekels in the first quarter of 2026, the highest in Israel by a significant margin: in Ramat Gan, the repayment is about 12,250 shekels, and on average for the 12 largest cities, only 10,859 shekels.

Such a repayment is higher than the average gross salary in the economy as a whole, meaning that purchasing an average apartment in the city is not possible on one salary even on paper. The only relief comes from the interest rate: the average mortgage interest rate fell to 4.69% in the first quarter, and the monthly repayment in Tel Aviv is about 7.7% lower than that recorded in the same quarter last year.

The only bright spot emerging from the current situation is, in fact, relevant only for those who have available capital. "For these buyers, the current period opens a window of opportunity in the Tel Aviv real estate market that has not been seen for years. This is a market that gives buyers more room for action: a variety of options, time to make informed decisions, and also bargaining power on properties that were previously sold quickly," notes Amit Franz, co-CEO of the brokerage firm Myplace.

According to him, at the same time, a growing gap is currently evident between the asking prices of apartments and the actual closing prices of transactions: "Although this gap has always existed, in the past it tended to narrow quickly during negotiations. Today, however, the gap remains significant and creates a sense of increased uncertainty among both sellers and buyers."