The American analytical portal Expert Market has published a list of cities in the world that are considered the best for the life and work of IT specialists.
Analysts at the portal analyzed the average income level, the amount of funding available to local startups, and the cost of living in different cities around the world. Tranio experts studied the five best techno hubs in the world according to Expert Market to find out how the concentration of IT specialists per square meter affects its cost?
Beijing
Beijing topped the list of the best cities for IT professionals to live and work in, even though it was not even in the top ten two years ago. Beijing is home to 56 Fortune 500 companies, which include the world's largest revenue organizations, manufacturer's headquarters smartphones Xiaomi and "Chinese Google", Baidu.
According to official statistics, wages in the IT sector in China are almost twice as high as in other areas. The average income of IT professionals in Beijing, according to one of the world's largest job search portals Glassdoor, is $ 25,000 a year. At the same time, the cost of living in the Chinese capital is low: on the Numbeo service, which collects data on prices in different countries, the city ranks 277 out of 439 cities.
According to the National Bureau of Statistics for 2016, the cost per square meter in Beijing is almost four times higher than the average in China. In 2013, the difference was less: real estate in the capital cost three times more than the national average. The rise in property prices in Beijing is largely associated with general economic indicators: since 2010, the population of Beijing has been increasing by 4-5% annually, the average income of the population has been growing, and urban GDP in 2016 exceeded the 2011 figure by one and a half times.
Berlin
Berlin ranked second in the Expert Market ranking. The city is called the "European Silicon Valley": more than 500 startups are opened here a year. According to the Berlin Business Location Center, € 1.07 billion was invested in startups in Berlin in 2018, 40% of which came from abroad.
The city offers excellent conditions for young companies: the cost of living in Germany is generally lower than in Europe, and renting and buying a home is much cheaper than in other large German cities: Munich, Frankfurt or Dusseldorf.
Berlin is one of the most active real estate markets in Germany. Cheap mortgages and an influx of population stimulate the growth of housing prices: the city is growing by 50 thousand people a year, with a total population of 3.6 million. Largely due to young specialists from abroad, today almost one fifth of Berlin's population is foreigners.
San Francisco
Home to giants such as Apple, Airbnb, Google, Facebook, Twitter and Uber, San Francisco is ranked third in the Expert Market.
IT professionals in San Francisco receive the highest salaries of any tech hub, but they also spend more: with an average salary of $ 137,000, according to Glassdoor data as of December 2018, life in Silicon Valley costs an average of 110 thousand dollars per year - more expensive than anywhere else in the US, concluded analysts of the financial portal Go Banking Rate.
San Francisco is experiencing a crisis in the affordable housing sector. According to the City Planning Department, low- to middle-income people can afford less than a third of properties built since 1990.
Austin
Austin was ranked fourth in the Expert Market ranking and was named the best place to start a business in the United States by CNBC in 2016.
The cost of living in Austin is almost two times lower than in San Francisco: according to the Go Banking Rate portal, the annual cost per household is about $ 55,000.This amount is 3,000 less than the average salary in the city. and 80% less than the average local IT workers earn.
Property prices in Austin are 60% above the national average and have been growing steadily over the past seven years. Local realtors believe that this trend will continue in the short term: demand for housing provides an influx of new IT professionals with high salaries, while the supply on the market remains limited.
Tel Aviv
Tel Aviv is ranked fifth in the Expert Market rating: according to the AT Kearney consulting company, the city is one of the global leaders in terms of the number of startups per square kilometer.
The main driver of real estate prices in Tel Aviv is the rapidly developing technology sector. This is the most expensive city in Israel, real estate in Tel Aviv costs 30% more than the national average.
The cost per square meter in Tel Aviv has dropped by 9% over the past year. According to the forecasts of experts from the Israeli business publication Globes, prices in the city will continue to decline: the flow of investments from abroad is reduced due to the increased cost of bank financing, while the volume of construction in the city is growing.
What other cities might be of interest to real estate investors? Analysts at the American commercial real estate company Cushman & Wakefield advise investors to pay attention to cities in Eastern Europe and India that have not yet received technology hub status, but are already beginning to attract high-paid IT workers.