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Latest analyses

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Return period on the purchase of an investment apartment is increasing in most tourist locations in Europe

Return period on the purchase of an investment apartment is increasing in most tourist locations in Europe

Half-yearly update of the ProfitLevel survey on the return on investment in an apartment for the purpose of renting it

Apartments in Spanish resorts remain the best return destination for investment in the first half of this year. Valencia continues to be in first place in the selection of ProfitLevel broker with only 17 years of return on the purchase of an investment apartment, followed by Barcelona with 19 years. In third place is Athens, where the investor receives the purchase price back in the form of a rent in 20 years.

 

This follows from a European survey of market sales prices and market rents for a one-room apartment (50 m2) in the city centre. ProfitLevel conducts regular half-yearly surveys focusing on urban tourist destinations in the European Mediterranean and Central Europe.

 

At the same time, Greek destinations are among the places where the prices of investment apartments have risen sharply over the last six months, while market rents have fallen. The result, in the case of Heraklion, Crete, is a record increase in payback period from 23 years to 36, more than 50 percent in the last six months.

 

The payback period for investment also increased significantly in Bratislava, from 26 to 31 years, as the price of buy-to-let apartments in the city centre increased by 10 per cent.

 

"The first half of the year in the monitored European destinations, with a few exceptions, brought further growth in the prices of apartments suitable for investment. However, market rents were not enough in most cases and in some cities it even fell. As a result, the payback period for the funds spent by the owner to buy the apartment is still longer," explained Lucia Žárská, Chief Analyst at ProfitLevel.

 

map_june 

 

In terms of return on investment through rent, the purchase of an apartment in Munich (return of 40 years), Dubrovnik (39) and Vienna (39) remains the least attractive The investment has also a long return to the owner of the apartment in Prague (35). The medium payback period is reported by other Central European metropolises - in addition to the aforementioned Bratislava, these include Budapest (30), Krakow (29) and Ljubljana (28).

 

About the methodology

 

The data is based on crowd-sourced data from Numbeo.com, which has over 100 datapoints even for small cities over the last 12 months. The data were collected as of June 11, 2022. Captured rents are in the category of one-bedroom apartments in the city centre. The data are cross-referenced with Statista.com or Catella.com ** The rates used are the average rates for 2022 according to the European Central Bank.

 

About ProfitLevel

 

ProfitLevel provides comprehensive investment services. Through a professional platform, clients have the opportunity to trade Forex, commodities, stocks and indices. The simple yet sophisticated interface is suitable for everyone, from beginning traders to advanced ones.

 

ProfitLevel is a registered trademark of BCM Begin Capital Markets CY Ltd, a Cypriot investment firm (CIF), supervised and regulated by the Cyprus Securities and Exchange Commission (CySEC), licensed under CIF No. 274/15, located at 2, Filiou Zannetou, Ground Floor, Office 1, 3021 Limassol, Cyprus.

 

Risk Disclaimer: Contracts for Difference are complex instruments and involve a high risk of rapid financial loss due to the use of leverage. 85.61% of retail investor accounts have incurred a loss when trading in contracts for difference with this provider. You should consider whether you understand how contracts for difference work and whether you can afford the high risk of losing your funds.

 

** Numbeo.com: https://www.numbeo.com/cost-of-living/ Statista.com: https://www.statista.com/statistics/1084608/average-rental-cost-apartment-europe-by-city/ Catella.com: https://www.catella.com/en/germany/research/catella-european-residential-market-map-q1-2022

Rent (month) 2 931 PLN Purchase (total) 961 250 PLN Salary (month) 5 284 PLN Interest rate 5,34 Payback period (years) 27,33 Warsaw Rent (month) 2 409 PLN Purchase (total) 845 204 PLN Salary (month) 4 627 PLN Interest rate 5,35 Payback period (years) 29,23 Krakow Rent (month) 19 975 CZK Purchase (total) 8 465 223 CZK Salary (month) 37 821 CZK Interest rate 4,79 Payback period (years) 35,32 Prague Rent (month) 1 378 € Purchase (total) 666 841 € Salary (month) 3 119 € Interest rate 1,68 Payback period (years) 40,30 Munich Rent (month) 633 € Purchase (total) 232 954 € Salary (month) 1 264 € Interest rate Payback period (years) 1,4 30,65 Bratislava Rent (month) 917 € Purchase (total) 428 723 € Salary (month) 2 286 € Interest rate 2,13 Payback period (years) 38,92 Wien Rent (month) 165 933 HUF Purchase (total) 59 981 818 HUF Salary (month) 356 900 HUF Interest rate 6,54 Payback period (years) 30,12 Budapest Rent (month) 646 € Purchase (total) 213 866 € Salary (month) 1 302 € Interest rate 1,92 Payback period (years) 27,57 Ljubljana Rent (month) 1 202 € Purchase (total) 411 750 € Salary (month) 1 806 € Interest rate 1,52 Payback period (years) 28,54 Milan Rent (month) 4 013 HRK Purchase (total) 1 877 488 HRK Salary (month) 5 841 HRK Interest rate 3,95 Payback period (years) 38,98 Dubrovnik Rent (month) 881 € Purchase (total) 295 000 € Salary (month) 2 377 € Interest rate 1,16 Payback period (years) 27,90 Nice Rent (month) 682 € Purchase (total) 236 666 € Salary (month) 2 463 € Interest rate 1,73 Payback period (years) 28,88 Marseille Rent (month) 979 € Purchase (total) 230 858 € Salary (month) 1 902 € Interest rate 2,02 Payback period (years) 19,65 Barcelona Rent (month) 723 € Purchase (total) 146 944 € Salary (month) 1 489 € Interest rate 2,12 Payback period (years) 16,92 Valencia Rent (month) 488 € Purchase (total) 118 637 € Salary (month) 849 € Interest rate 4,07 Payback period (years) 20,23 Athens Rent (month) 350 € Purchase (total) 150 000 € Salary (month) 646 € Interest rate 3,33 Payback period (years) 35,71 Crete (Iraklion) Rent (month) 737 € Purchase (total) 220 000 € Salary (month) 1 121 € Interest rate 2,83 Payback period (years) 24,86 Gran Canaria (Las Palmas)

The content of this material constitutes marketing communication and should not be considered as any type of investment advice and/or investment research and/or a solicitation for any transactions. This material was prepared for informational/educational purposes only and does not imply an obligation to perform investment transactions nor does it guarantee or predict future performance. BCM Begin Capital Markets Cy Ltd and its relevant persons including affiliates, agents, directors, or employees do not guarantee the accuracy, validity, timeliness, or completeness of any information/data provided by third parties and assume no liability for any loss arising from any investment made based on the said information/data. Past performance is no guarantee of future results.

More analyses

Profile photo of Lucia Žárska

Chief Analyst at ProfitLevel

Lucia Žárska

Co-founder of the Mafinn website where she educated the general public about different types of investments. As she says, investing can be clear, understandable and accessible to all, you just need to be aware of how to do it. For this reason she decided to pursue her next career into financial markets. As the chief analyst of the brokerage company ProfitLevel she focuses on this topic more deeply and specifically. At the same time she continues to write professional texts about capital markets for the print and online media, also for blogs.

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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 88.85% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the Risk Disclosure

BCM Begin Capital Markets CY Ltd. currently does not accept registrations from Slovenian nationals or residents.