These Are The World's Most Affordable Cities For Renters

Kuala Lumpur was ranked no.1 in the list of 30 international cities.

Cover image via RENTCafé

Kuala Lumpur has taken the crown as the most affordable city for renters, claims a study by rental search company RENTCafé

The study by RENTCafé is based on a 'Cities of Opportunity' report by the global professional services firm, PricewaterhouseCoopers (PwC), which lists the best cities to work and live in. Kuala Lumpur was placed number 20 on PwC's report.

According to PwC, these are the world's best Cities of Opportunity:

Image via PwC

If the PwC report placed Kuala Lumpur on 20, how did RENTCafé managed to put it on top of the list for their study?

The PwC report ranked the top 30 cities by analysing indicators like infrastructure, intellectual capital, sustainability and ease of doing business.

RENTCafé, on the other hand, took this information and found out the amount of salary people earn in these cities and whether their salaries were enough for them to afford rental apartments. They examined the average rent of each market and median incomes to calculate the rent-to-income ratio for every city of opportunity.

For its study, RENTCafé obtained data for the household income from the Department of Statistics Malaysia, and rent data from online marketplace

According to RENTCafé, housing costs exceeding 30% of the household income have been viewed as a red flag.

They adopted this as their first threshold and considered the cities where the average rent was 30% or less of the local median household income to be burden-free.

Based on which, Kuala Lumpur was ranked as the cheapest city for renters because only 20% of what people in the city earn is spent on renting an apartment.

Image via RENTCafé

While it considered the cities where the average rent was 30% or less of the local median household income to be burden-free, RENTCafé also divided the list in two: moderately (31-50% rent to income) and severely rent-burdened cities (upwards of 51%)

Which made London, a city that was ranked as the world’s best to work and live in by PwC, slide back 21 places when ranked by rental affordability.

The same manoeuvre also made Kuala Lumpur claim the crown as the most affordable city for renters, beating other cities in Asia that come close, like Beijing on the 7th place with 27% rent to income ratio and Shanghai with 28% rent to income at number 8.

Singapore, while boasting the largest income, is moderately rent-burdened (44%) and was ranked 25th, as nearly half of the residents income is spent on rent.

According to the study, the median household income a year in KL is RM96,152 while the average annual rent is RM19,316, resulting in a rent-to-income ratio of 20%.

This infographic by RENTCafé shows the complete list:

Image via RENTCafé

However, a report by local website FMT has cited some locals saying that renting apartments in Kuala Lumpur is not cheap at all

It quoted Batu MP Tian Chua saying that the study by RENTCafé had obviously not taken into consideration the living conditions for renters in Kuala Lumpur.

FMT also quoted tenants in the city who regard the rental rates in KL as high.

One Chia Man Weng, who pays RM1,200 a month for his apartment unit, was quoted saying that, "Location sets the line for the price of the rental in Kuala Lumpur. Those apartments which have easy access to LRT and train stations will fetch higher rentals."

Another tenant named Nur Ihsan Fadhlina Azizan said, "I get a cheaper rental price by sharing the room, but even so they are not fully furnished." Nur Ihsan pays RM230.

What do you think about the RENTCafé's study and its ranking of KL as the most affordable city for renters?

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