Expat Essentials

The next Berlin? Dispatches’ 2017 list of Europe’s Top 5 affordable cities for expats

Our first “best cities for expats” list was a huge success, racking up more than 100,000 views within a few days of posting. Which is pretty good when you’re new.

Eindhoven, our HQ, topped the list and not because we live here. We did months of research before we started Dispatches, weighing the plusses and minuses of cities including Basel (what were we thinkin’?), Berlin, Frankfurt and Vienna.

Eindhoven won on every level – affordability, concentration of talent, location in the center of Europe, a great international school and terrific quality of life. It ain’t Amsterdam, but it’s just over an hour away.

Since then, Europe has entered a boom phase and suddenly cities that were affordable aren’t. Increasingly, the question is “Where’s the sweet spot?” Or, more bluntly, where is the next Berlin? Affordable, cool and exciting. A city with both career opportunities AND a relatively low cost of living.

We’re looking at this from the perspective of expat entrepreneurs and highly skilled internationals, so we’d still recommend Eindhoven as the all-around best choice. But with rising rents across the Netherlands, it’s no longer a huge bargain. For instance, when we first started looking at Eindhoven, rental rates were still stuck in the Great Recession. Now, it’s difficult/impossible to find a 3-bedroom in the Centrum for less than 2,000 euros per month.

Cities such as Berlin that were once affordable are now boomtowns, but we’re still using Berlin as our benchmark city since it remains a Mecca for the creative class and expats.

Other cities such as Istanbul, Budapest and Warsaw that have sophisticated economies are disqualified because of increasingly authoritarian governments and/or anti-foreigner sentiment. No places for our audience of English-speaking expats.

So, what are the qualifications for “most affordable cities”?

  • The city has to have housing availability and fairly affordable rents/real estate at least comparable to our benchmark of Berlin, where it’s increasingly tough to even find a place to live.
  • The city has to have a reasonable tech/startup scene and be entrepreneur-friendly.
  • Overall cost of living has to be at or below our benchmark city. Read, “you can afford to go out for a beer or a glass of wine and sushi every now and then.”
  • English should be prevalent, if not the main business language.
  • There have to be educational opportunities for internationals.
  • It has to be safe and secure. And that’s pretty easy considering almost anywhere in Europe is safer than, say, the United States, though turmoil in cities such as Istanbul and corruption in much of Italy get them excluded.

Frankfurt, which is No. 2 on our Best Cities list, isn’t going to make this list because it’s picking up giant financial institutions bolting from London due to Brexit. And that’s going to put serious pressure on everything from housing to restaurant prices.

The action now increasingly is in the former East Bloc countries including the Baltics, and in formerly struggling economies such as Portugal and Spain.

True, some are farther along than others, and many cities such as Sofia have promise, but still a ways to go.

Still, as a general rule of thumb, it’s better to be in at the beginning of something than the end.

(Editor’s note: Numbeo, which is a crowd-sourced data-collection website that’s constantly updated, indicates you can get a 3-bedroom apartment in Berlin for as a little as 1,500 euros per month. In our 2015 exploratory trip, we never saw 3-bedrooms for less than 2,000 euros. So we’re going with that higher figure, which we believe is far more accurate.)

No. 1 Tallinn, Estonia

Tallinn is a strong candidate for No. 1. Increasingly, Estonia is the most advanced digital nation not just in Europe, but in the world. And don’t forget … it was Estonian developers who wrote the code for Skype and other big innovations for which other countries get credit.

Tallinn is a modern city with a thriving startup scene and a scenic Old Town. Think “a more affordable version of Stockholm or Helsinki … Nordic vibe and culture for half the price,” says American expat Alex Wellman.

The cost of living is rising, but according to our sources, it’s still a lot cheaper than Germany or Sweden. 

Monthly rents start at about 300 euros for a studio apartment, while a lunchtime meal with a drink in town is about 7 euros. Wellman, head of marketing for Estonia’s e-Residency effortpays about 600 euros a month for a top floor apartment with a balcony, sauna, and sea view in the center of the city!

 The cost of commuting by public transport is waaay low … trams and buses are free for all residents.

There’s a new foodie scene based on NOMA-like scavenging as well as big opportunities. TransferWise, Pipedrive, Taxify and other tech companies are hiring right now in Tallinn, Alex said. Also, Estonia has its new startup visa program that helps people move to Estonia, he added.

Negatives: The weather. Let’s face it … the Baltics are well on the way to the Arctic Circle, and Estonia is the farthest north of the three. At 59 degrees north latitude, Tallinn is roughly at the same latitude as Stockholm and St. Petersburg (NOT the one in Florida). The good news: One pair of shorts should get you through, though bring extra Vitamin D. And maybe a Happy Light.

The numbers, courtesy Numbeo:

Rents in Tallinn turned out to be pretty affordable compared to Berlin. But other areas are roughly equal. From Numbeo:

You would need around 3,332.72 euros in Berlin to maintain the same standard of life that you can have with  in Tallinn (assuming you rent in both cities).

  • Cost of a one-room apartment in the city center: 450 euros in Tallinn compared to 750 euros per month in Berlin
  • Cost of a three-room apartment in the city center: 750 euros compared to 2,000 euros per month in Berlin
  • Average monthly salary after taxes: about 900 euros per month compared to 2,000 euros in Berlin
  • Domestic beer: 3 euros, the same as in Berlin
  • Meal for two people at a nice restaurant: 40 euros, roughly the same as Berlin
  • International primary school: 12,500 to 17,000 euros per year versus 19,000 euros in Berlin.
  • Preschool (or kindergarten): from 500 euros per month versus 56 euros per month in Berlin

No. 2 Vienna, Austria

Okay, Vienna is not the least expensive city in Europe … not by a long shot. But, it is among the few affordable capital cities of Europe, and a city that has massive opportunities. It has a number of major corporations with operations/headquarters including Johnson Controls, IBM and GE, and EasyJet is on the way.

While it’s comparable to Berlin, Vienna is more affordable than London, Paris and Stockholm. Vienna has bright spots including housing demand that doesn’t exceed supply. So, rents aren’t beyond the means of entrepreneurs and expats. Moreover, we’ve had a number of posts about Vienna’s expanding Aspern Seestadt development, which with its own subway access likely will take some pressure off the real estate market.

We’ve visited several times and Vienna really is one of the lovelier, more vibrant cities in Europe. Which is why it tops Mercer’s World’s Best Cities list year after year.

While it lags behind top innovation centers such as Berlin and Stockholm, we know it has a budding digital startup scene. Vienna also has one of the finest mass-transit systems in the world, comparable to Stockholm. The difference is, you can actually find a place to live in Vienna.

Negatives: Finding a school for your kids is going to be expensive. According to our research, tuition at an international school is going to cost you at least 12,000 euros per year.

The numbers, courtesy Numbeo:

  • Cost of a one-room apartment in the city center: 757 euros per month compared to 750 euros in Berlin. But, you can find an apartment in Vienna relatively easily.
  • Cost of a three-room apartment in the city center: 1,560 euros per month compared to 2,000 euros in Berlin
  • Average monthly salary after taxes: about 1,900 per month compare to 2,000 euros in Berlin
  • Domestic beer: 3.80 euros compared to 3 euros in Berlin
  • Meal for two people at a nice restaurant: 45 euros compared to 40 euros in Berlin.
  • International primary school: 12,500 to 17,000 euros per year, slightly less than in Berlin.
  • Preschool (or kindergarten): from 100 to 250 euros per month in Vienna compared to about 56 euros in Berlin.

No. 3 Lisbon, Portugal

This is more of a prediction than reality. Yes, Lisbon has stolen away Web Summit from Dublin, but one kinda shady tech event does not a Palo Alto make. Still, every tech website on the planet has anointed Lisbon – and Portugal in general – as the new, new thing both because of the weather and attractions and its strides in tech.

And who wouldn’t want to live and work in a place that’s basically a permanent vacation?

Because of its reputation as an emerging innovation center, we had Lisbon ranked No. 4 on our Best Cities list behind Eindhoven, Frankfurt and Vienna.

Will it be the next Berlin? Who knows. But at least you won’t freeze to death here while you’re waiting for it to happen.

Negatives include English isn’t as dominant here as it is in Northern Europe, though there is a large British expat community.

The numbers, courtesy of Numbeo:

You would need around 2,522.42 euros in Lisbon to maintain the same standard of life that you can have with  in Berlin (assuming you rent in both cities).

  • Cost of a one-room apartment in the city center: 650 euros versus 757 euros per month in Berlin
  • Cost of a three-bedroom apartment in the city center: 1,250 euros per month versus 2,000 euros in Berlin.
  • Average monthly salary after taxes: about 900 euros per month compared to 2,000 euros in Berlin.
  • Domestic beer: 1.50 euros compared to 3 euros in Berlin
  • Meal for two people at a nice restaurant: 30 euros compared to 40 euros in Berlin
  • International primary school: 8,500 euros per year compared to 12,500 to 17,000 euros per year in Berlin.
  • Preschool (or kindergarten): 378 euros per month compared to 56 euros in Berlin

No. 4 Bratislava, Slovakia

In the same way Eindhoven is close to Belgium, Germany and France, Bratislava is close to three major Central European cities: Vienna, Budapest and Brno in the Czech Republic or whatever it’s called now.

So, the “ecosystem” is much larger than the city itself, or even the country. Which – let’s face it – is tiny, with Slovakia having a total population of only 5.5 million, way less than the population of London.

Amazingly, Bratislava – population 421,000 – is home to 107 companies on this year’s Inc. 5000 Europe list of the fastest-growing private companies in Europe just behind Stockholm with 134 and London with 177. AT&T, Lenovo, and Dell have operations in Bratislava.

That certainly got our attention.

Global startups from the country include ESET anti-virus software, Sygic and Pixel Federation. Swiss-based DECENT, the Blockchain-based content encryption startup, was founded by Slovak co-founders Matej Michalko and Matej Boda and has offices in Bratislava. Then there’s the Slovak University of Technology, which supplies the talent.

TechCrunch has a good post on Bratislava.

Negatives include English not being a dominant language.

The numbers courtesy of Numbeo:

You would need around 2,234.63 euros in Bratislava to maintain the same standard of life that you can have with  in Berlin (assuming you rent in both cities).

  • Cost of a one-room apartment in the city center: 535 euros versus 757 euros per month in Berlin
  • Cost of a three-bedroom apartment in the city center: 909 euros per month versus 2,000 euros in Berlin.
  • Average monthly salary after taxes: about 930 euros per month compared to 2,000 euros in Berlin.
  • Domestic beer: 1.50 euros compared to 3 euros in Berlin
  • Meal for two people at a nice restaurant: 25 euros compared to 40 euros in Berlin
  • International primary school: 12,000 euros per year compared to 12,500 to 17,000 euros per year in Berlin.
  • Preschool (or kindergarten): 380 euros per month compared to 56 euros in Berlin

 

No. 5 Eindhoven, the Netherlands

Eindhoven is still a bargain because, well, it lacks charm. Let’s just say it. But it doesn’t lack opportunity.

This might be the rare European boomtown where highly skilled internationals are seeing salaries – pushed up by the global war for talent  – rise at a faster rate than the cost of living.

We could have also put Rotterdam on this list. But Eindhoven wins because it has an international school with tuition below 10,000 euros per year. Try to find THAT in Zurich, Amsterdam or Berlin.

Will Eindhoven ever become the next Berlin? Not in the romantic sense … the city that reinvents itself as the destination for bohemians, artists and creative types. But it very well could become Mountain View, the city where entrepreneurs and digital pioneers trade conventional notions of esthetics for a chance to create the future.

The numbers courtesy of Numbeo:

You would need around 3,410.75 euros in Eindhoven to maintain the same standard of life that you can have with  in Berlin (assuming you rent in both cities).

  • Cost of a one-room apartment in the city center: 900 euros versus 757 euros per month in Berlin
  • Cost of a three-bedroom apartment in the city center: 1,300 euros per month versus 2,000 euros in Berlin.
  • Average monthly salary after taxes: about 2,250 euros per month compared to 2,000 in Berlin
  • Domestic beer: 3 euros, the same as Berlin.
  • Meal for two people at a nice restaurant: 45 euros compared to 40 euros in Berlin.
  • International primary school: 5,000 euros per year compared to 12,500 to 17,000 euros per year.
  • Preschool (or kindergarten): from 600 euros per month compared to 56 euros per month in Berlin

Negatives: Eindhoven is starting to get too popular, with 30,000 more highly skilled internationals expected to arrive during the next five years.

Runners up:

Riga, Latvia

We have Latvian friends and relatives, so we have an actually Ground Truth source on this. A lovely, affordable place to live, but not quite there when it comes to being a tech center.

Sofia, Bulgaria

When we’ve written glowingly about Sofia, actual Bulgarians were the most skeptical. They’ve been trying to get out of town for opportunities in the rest of the EU. Also, though it’s getting better, corruption is an issue. Still, we’ll stick by our assertion that Bulgaria and other Eastern European countries will emerge as innovation centers.

“Sofia is for dynamic young people who develop careers in IT and innovation sectors,” says regular Dispatches contributor Kalina Varbanova. Indeed!

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