How Europeans live and what it costs them

Is renting a dwelling a profitable investment?

Apartment rental yields in European cities ranges between 2 percent and 9 percent. At the same time, the highest transaction price growth in 2016 was surprisingly recorded in Slovenia. The most expensive city remained inner London. These are selected results of the most recent Deloitte Property Index, which compares the market with residential properties in selected European countries and cities and in Israel.

Executive Summary

The sixth edition of Deloitte Property Index study focused on the rental market for the first time in its history. Rental housing is the most popular among Germans (54.3 percent of total number of households) or Danes (46.6 percent) and the least among Slovenians (2.4 percent). These figures show that the rental market plays an important role in the real estate business recently. Anyone considering buying an investment property (also known as buy to let method) will be interested in what return the property will give him or her, in other words, its yield. Deloitte Property Index therefore dealt with the comparison of average rent level and transaction price of a dwelling. The lowest yield from rent in all of the compared cities was recorded in central London (2.0 percent), followed by inside Paris (2.8 percent) and the highest in Odense, Denmark (8.9 percent) followed by Budapest, the Capital of Hungary (7.9 percent). From another perspective, Copenhagen was the place with the highest monthly rent (€29.30 per square meter). On the other hand, the lowest rent level has been seen in Algarve Region in Portugal (€4.20 per square meter).

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REflexions issue 6 - November 2017

REflexions is a bi-annual digest, dedicated to the real estate investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.

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