By Ashley Osborne | Head of UK Residential & Managing Director – International Properties

 

Properties in safe havens and up and coming locations make great investment opportunities. Not only will the rent you receive act as a source of continuous income, you will also get to enjoy long-term capital appreciation. Therefore, knowing exactly where to invest is essential. Below are the top 8 cities we recommend for property investment.

1. London

Consistently ranked as the best city for property investment globally, London is ever-enticing to  investors with its competitive market and open property investment policies.

London City's Downtown Aerial view

Key features of London that make it a great investment opportunity:

  • Unmatched in its appeal to the wealthy, from culture to financial security, despite recent tax reforms.
  • Having one of the most reliable transport infrastructures in the world, its properties are always highly sought after. The new Crossrail system opening in 2019 will substantially increase the value of neighbouring counties, creating new opportunities for property investors.

2. New York

New York is one of the most stable and transparent real estate markets in the world with high income and diverse cultures.

Aerial view of Empire State Building and New York City Skyline

Three reasons why New York is one of the first cities that come to mind for property investment:

  • There is a high demand for rental properties as its positive economic environment and quality of life continue to attract immigrants from all over the world.
  • As an investor, you get to enjoy tax benefits on your property as your depreciable property allows for tax deductions every year.
  • Buying costs are typically low, ranging from 1% to 8% of the purchase price.

3. Sydney

Australia’s housing market continues to grow despite slow economic growth in the past 30 years with Sydney leading the way.

Aerial view of Sydney Opera House, harbour, and skyline during daytime

Key benefits of investing in Sydney:

  • The city boasts Australia’s highest living standards, making it an attractive location for both people within and out of the country, which has resulted in a consistently strong demand for housing.
  • Having some of the highest housing prices in the country, investing in Sydney can help you achieve your short-term investment goals, or generate a steady stream of rental income as higher prices steer people towards renting.
  • Property buying costs are moderate in Australia, ranging from 3.76% to 21.15% of the property value.

4. Melbourne

Only second to Sydney in terms of housing market prices in Australia, Melbourne is one of the best cities for overseas property investors.

View of Melbourne city from sky during daytime

Top reasons why you should consider investing in Melbourne:

  • Having been crowned the most liveable city in the world for the sixth year in a row in 2016, Melbourne’s population and demand for rental housing are consistently on the rise.
  • High demand and low housing supply raised prices greatly. It is estimated that the city needs 600,000 houses in the next 10 years to cope with the increasing population. With more residential developments planned, it is a good time for investors to make their move.
  • It enjoys one of Australia’s most advanced and best connected road, rail and marine transport infrastructures.

5. Toronto

One of Canada’s most active and expensive housing market, Toronto is Canada’s largest city and North America’s fifth most populated municipality.

Toronto downtown skyline view

Key reasons to invest in Toronto:

  • The city is home to North America’s third largest public transit system, expanding the potential investment area to outer regions with its well-connected infrastructure.
  • Properties in Toronto typically yield a rental income of 4.4% – 5% and should you decide to sell your property in the long run, only 50% of the capital gainsare liable to tax.
  • Total buying costs and related taxes amount to around 4.7% to 11% of the value of the property, making it one of the lowest in North America.

6. Tokyo

Investors contemplating buying residential property in Asia would have come across Japan when thinking where to invest. The Japanese housing market has flourished despite the relatively modest economic growth with Tokyo leading the way.

View of Tokyo city's street life at nightCopyright @ Moyan Brenn – Flickr.com

Here’s why Tokyo has seen many property investors:

  • With the upcoming 2020 Olympics being hosted in Tokyo, demand for property, and subsequently, property developments are expected to grow.
  • Tokyo’s Rental income tax is one of the lowest in the world, ranging from 3.4% to 5.9%
  • Japan is strongly pro-landlord, a major incentive for overseas investors.
  • Tokyo has one of the highest net worth population in the world, aiding the continued demand for housing.

7. Dubai

Renowned as one of the rising 21st century cities with 5th highest performing economy in the world, Dubai’s property market has seen a huge surge in demand from international investors.

Dubai downtown skyline at night

Three reasons why Dubai is one of the best cities for property investment:

  • Its population is largely comprised of the international / expat community with 88.7%, who mostly live in rental properties.
  • Compared to the major investment safe haven cities, buying costs in Dubai are among the lowest.
  • Property investors enjoy various tax benefits such as capital gains tax, inheritance tax or income tax relief

8. Los Angeles

Located in the sunny west coast of the United States with access to beaches and mountains, Los Angeles is one the most sought after leisure cities in the US, making its residential properties equally sought after by overseas and local investors alike.

Los Angeles Skyline daytime aerial view

A few advantages of investing in Los Angeles:

  • Residential property prices are increasing fast, mainly due to the diminishing land for developments.
  • High prices of homes drive people to rent, making it a lucrative market for buy-to-let investments.

Ultimately, where you invest should align with your investment goals and budget. Do your research well, and don’t forget to consult the experts who can prepare you with all the information you need to capitalize on the best property investment opportunities arising from these cities.