At the centre of the action: Paris, Rome and New York are fast becoming favourites with investors

view gallery VIEW GALLERY

They offer vibrant lifestyles and a great rental return, says Cathy Hawker

Ever since Dick Whittington fell for the story about the streets of London being paved with gold, cities have exerted a strong gravitational pull. Gold may not be in abundance – but culture is on tap, the populations are often cosmopolitan and youthful, and opportunity can often be found around every corner.

Cities occupy 2 per cent of the earth yet are home to 53 per cent of the world's population, a figure predicted to reach 75 per cent by 2050.

For discerning overseas home buyers, too, cities have become more attractive. While sun, sea and sand were once the overwhelming reasons to buy abroad, figures from Knight Frank show that 37 per cent of second homes are now in cities. At the same time, buyers are more concerned than ever about rental returns, eager to find property to enjoy and to provide some income. So where are the cities that combine alluring lifestyle with a potential rental jackpot?

Top-performing cities

Recent research from the rental website holidaylettings.co.uk on the best- performing overseas cities for rental occupancy show New York, Paris and Rome are the winners, achieving up to 45 weeks a year. That compares with prime summer-sun destinations, such as Ibiza, where the occupancy norm is closer to 12 weeks.

"Both Paris and St Tropez have good renting seasons but while the season in southern France is April to October, Paris will perform better year-round," Kate Stinchcombe-Gilles, of Holiday Lettings, says. "Good quality, well-located city apartments attract weekenders in any month."

The latest global research from Savills also demonstrates the strength of rental returns in the world's most-visited cities. New York and Paris are not seeing the stellar capital growth of cities such as Hong Kong or Singapore, yet they outperform those cities for rental yields. "Our research shows average yields in New York and Paris are 6.2 per cent and 4.6 per cent respectively," Yolande Barnes, of Savills Residential Research, says.

"Comparable property prices in Hong Kong are almost twice as expensive but rental yields are 3.1 per cent. New York property in particular looks good value at present with capital values still 15 per cent below their 2007 highs."

New York – it's up to you

The housing market in the US is bad, Elizabeth Stribling, of Savills Stribling, says. New York prices are back to levels last seen in 2005 – but the Big Apple has ridden out the storm better than elsewhere. "New York has had few foreclosures and most buyers are cash purchasers," she says. "The cheaper dollar, coupled with more affordable prices than London or Paris, help the market."

A third of all new condo developments in New York are purchased by non-American buyers. They include: Chinese, who buy near universities for their children; Russians who choose large trophy properties; and hip Europeans spending £640,000 in Brooklyn.

Stribling has a two-bedroom apartment in Midtown Manhattan for £800,000, while across the East River in Brooklyn an airy three-bedroom apartment is £587,265. A two-bedroom apartment close to the expanse of Central Park is £612,755 through Sotheby's.

Weak euro boosts Paris

International demand is also driving the market in Paris, where the weak euro is encouraging South Americans and Russians to snap up property. The city's compact historic centre and a lack of new developments conspire to keep the supply of accommodation low and prices high.

"Look at the edge of the Marais in the fourth arrondissement, the southern end of the sixth towards Luxembourg Gardens and the borders of the first and second to find value," Mark Harvey, of Knight Frank, says. "But keep in mind that property in the more edgy spots may have shabby communal areas. Ask who manages the building, and whether there is a sinking fund for renovation to avoid facing a large bill for repairs."

Chesterton Humberts has a two-bedroom apartment in the prestigious eighth arrondissement is £511,300. A one-bedroom penthouse close to the Louvre is £563,000 with Knight Frank. Rental yields are strong.

Homes in vibrant Rome

A well-located Rome apartment rents for 40 weeks each year, according to Holiday Lettings figures, with Trastevere and the Centro Storico particularly popular. Average square-foot prices are £950 to £1,210 with an elegant two-bedroom apartment in atmospheric Campo de'Fiori priced £1.17m, through Knight Frank.

"The Centro Storico is vibrant but noisy," Cristina Casacci, of Knight Frank, says. "Parioli Pinciano, an upmarket residential area north-west of the centre with early 1900 buildings is more peaceful." Expect to pay from £433,400 for a compact flat in this hilly part of Rome close to the shady pine trees of Villa Borghese.

A high-ceiling, two-bedroom apartment there is £953,480, through Knight Frank. Near the Tiber in a period building on the grand Via Banchi Nuovi, Casa Travella has a 740sq-ft second-floor apartment in a period building for £736,780.

Savills (020 7016 3740); Knight Frank (020 7869 8171); Holiday Lettings (01865 312010); Savills Stribling (020 7016 3740); Sotheby's (+1 212 606 7769); Casa Travella (01322 660988).

Paris pads: A landlord's view

Jessica Buriereau, 21, is following in a family tradition by renting out her Paris flat. Her father has three apartments in the city that he lets for up to £1,040 a week, while Jessica lets her own 269sq-ft apartment near Montparnasse station. "Nothing is easier than renting out an apartment in Paris," Jessica says. "I rent mine mainly to friends and family but my father, who wants visitors all year round, rents through holiday websites. He gets 85 per cent annual occupancy with only November and February difficult to fill." Jessica, who works in strategy for an industrial company, charges £735 a month for longer lets and £260 a week for shorter periods.

Discover more property articles at Homes and Property
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Clinical Lead / RGN

£40000 - £42000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: IT Sales Consultant

£35000 - £40000 per annum: Recruitment Genius: This IT support company has a n...

Recruitment Genius: Works Engineer

Negotiable: Recruitment Genius: A works engineer is required in a progressive ...

Recruitment Genius: Trainee Hire Manager - Tool Hire

£21000 - £25000 per annum: Recruitment Genius: Our client is seeking someone w...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent