THE BEST AND WORST REAL ESTATE MARKETS IN EUROPE: WHERE TO INVEST IN 2024?

When it comes to real estate investments, rental yield is essential.

Higher rental yields indicate better returns on investment, a key consideration for any savvy investor.

For example, purchasing a property for €500,000 and earning a monthly rent of €2,000 (or €24,000 annually) results in a gross annual rental yield of 4.8%.

After accounting for taxes and other expenses, the net yield will be lower.

Euronews analyzes the latest data from the Global Property Guide, updated as of Q1 2024, to uncover which European countries and cities offer the best and worst property rental yields.

Latvia, Ireland, and Italy lead the list with strong average rental yields, indicating prime opportunities for investors. Latvia, with a rental yield of 8.06%, stands out as the highest in Europe.

If current rental yields remain stable, it would take approximately 12 years of rental income to recoup an initial property investment in Latvia. In Ireland and Italy, it would take about thirteen and fourteen years, respectively.

1. Latvia – 8.06%
2. Ireland – 7.85%
3. Italy – 7.38%
4. Romania – 6.63%
5. Lithuania – 6.44%
6. Turkey – 6.36%
7. United Kingdom – 6.21%
8. Spain – 6.17%
9. North Macedonia – 6.00%
10. Montenegro – 5.95%

Focusing on major European cities, Dublin emerges as the leader with an average rental yield of 7.33%. In Dublin, two-bedroom units represent a lucrative investment. Investors would need to invest €365,000 to generate a monthly rent of €2,500, resulting in yields of up to 8.22%.

Istanbul and Riga are also attractive options, with average rental yields of 6.6% and 6.5%.

1. Dublin, Ireland – 7.33%
2. Istanbul, Turkey – 6.63%
3. Riga, Latvia – 6.46%
4. Bucharest, Romania – 6.36%
5. Podgorica, Montenegro – 5.7%
6. Lisbon, Portugal – 5.65%
7. London, UK – 5.59%
8. Brussels, Belgium – 5.54%
9. Warsaw, Poland – 5.51%
10. Vilnius, Lithuania – 5.47%
11.  

Luxembourg, offering the lowest yield at 2.67%, is the least attractive for property rental income.

In Luxembourg, a two-bedroom apartment has an average purchase price of €1.2 million. However, with an average monthly rent of €2,800, this investment yields a gross rental return of just 2.7%.

In Luxembourg, investors would need an average of 37 years to recoup their initial housing investment through rents, assuming constant yields. Switzerland follows closely, requiring 33 years to break even.

Real estate investors aiming to maximize returns might want to avoid these markets.

1. Luxembourg – 2.67%
2. Switzerland – 3.05%
3. Austria – 3.59%
4. Malta – 3.66%
5. Germany – 3.74%
6. Norway – 3.79%
7. Czech Republic – 3.95%
8. Denmark – 4.16%
9. Belgium – 4.20%
10. Finland – 4.24%

Oslo ranks the lowest with a mere 2.46% average rental yield. For instance, a one-bedroom apartment costing Maria €379,731 garners an average monthly rent of €894, resulting in a yield of just 2.83%.

Zurich ranks as the third least attractive European city for property rental income. Investors would need to invest €1.1 million to buy a two-bedroom flat in Zurich, but with an average monthly rent of €2,538, the gross annual yield is only 2.8%.

1. Oslo, Norway – 2.46%
2. Luxembourg, Luxembourg – 2.71%
3. Zurich, Switzerland – 2.79%
4. Vienna, Austria – 3.64%
5. Valletta, Malta – 3.67%
6. Helsinki, Finland – 3.8%
7. Berlin, Germany – 3.83%
8. Sofia, Bulgaria – 4.04%
9. Prague, Czech Republic – 4.05%
10. Bratislava, Slovak Republic – 4.11%