Berlin and cheap? At first glance, the two don’t seem to go together when you consider the rising rents and cost of living in the capital. But despite this, a study has now rated Berlin as exactly that: the German metropolis is ranked 13th lowest in the world for the cost of living. We explain how this ranking came about and why Berlin achieved this position.
What criteria does the ranking measure?
In a market research study, a city index was created that compares the 42 economically developed capital cities. The aim was to determine the world’s most cost-effective places to live. This is because the cost of living has risen noticeably everywhere in recent years. These 11 factors were analyzed:
- Average electricity price 🔋
- Average annual salary 💰
- Unemployment rate 🏢
- Interest rate 💶
- Average fuel price ⛽
- Public transport 🚌
- Milk price (1 liter) 🥛
- Bread price (500g white bread) 🍞
- Coffee price (cappuccino) ☕
- House price index (since 2015) 🏠
- Rental price index (since 2015) 🛋️
What are the results for Berlin?
Particularly good in Berlin: public transport is affordable with an average price of €3.38 for a single journey. Salaries are also very high on average (€53,891 per year) and the interest rate is comparatively low (3.65%). Fortunately, the unemployment rate is low (3.4% nationwide), and these factors in particular have contributed to the German capital making it into the top 15.
However, other factors are less flattering for Berlin. Electricity costs are among the highest in the world (€0.35/kWh), and fuel costs are also above average compared to other countries (€1.57/liter). The house and rent price index has also risen since 2015.
With a milk price of €1.09 per liter, the capital is at the lower end of the scale, while Berliners pay €1.88 for 500 grams of white bread. We spend an average of 3.55 euros on a cappuccino.
And how do other cities fare?
The South Korean capital Seoul takes first place in the low cost of living rankings. Of all the cities compared, Seoul had the lowest unemployment rate at 2.5%. Brisbane in Australia came in second place – mainly due to its cheap transportation and fuel. Luxembourg followed closely behind with its above-average salaries and free public transportation.
In contrast, Dublin and Copenhagen came in last place, as the high electricity and rent prices in Ireland are a problem for the capital. And for the average coffee price of 5.77 euros in Denmark, you have to have a decent salary. But Iceland’s Reykjavík brings up the rear in the ranking: nowhere else is transportation and petrol more expensive.
It should be noted that there is still room for improvement in Berlin, especially when it comes to expensive electricity and rents. But the new city index proves what we already knew: The German capital is a great place to live!