Month: November 2022

Purchasing a holiday home abroad can be a valuable investment, whether you plan to make use of it yourself or rent it out to others.

As a result of international travel restrictions, the number of holiday lets in England alone has risen by 40% over the past three years. This may continue to rise with staycations expected to remain popular into 2023. With seaside resort areas like Scarborough, North Devon, and East Suffolk seeing the biggest increases in the UK,  where are the best cities overseas to buy and let a property?

To reveal the world’s best cities to purchase and rent out a holiday home, CIA Landlords Insurance has analysed 50 cities with thriving tourism ecosystems, ranking them based on metrics including tourist arrivals, house purchase prices per m2, average temperatures, and more.

We’ve also calculated which cities are the most and least profitable for landlords, based on how long it would take to earn back the property’s purchase price and how much could be earned by renting it out on Airbnb.

Istanbul is the best city in the world to buy a holiday home 

Turkey is also home to the second best city to buy and rent a holiday home, with Antalya ranking just behind Istanbul. Compared with the capital city, property prices per square metre are cheaper at £972.39 on average, resulting in lower Airbnb rental earnings averaging £2,270.00 per month for a two bedroom house.

Interestingly, Istanbul and Antalya are the only two European cities to make the list, with the rest of the top ten made up from cities in Asia and Africa such as Dubai, Cairo, and Malaysia.

Denpasar, Indonesia is the most profitable city for holiday homes, with the investment paying off in just eight months

Singapore is the least profitable city for holiday home owners, taking more than 50 years for an investment to pay off

Rank	City	Country	Average monthly price for 2-bed Airbnb (£)	Purchase price of house per m2 (£)	Average price for two bed (74.32m2)	Number of months to pay off two bed home	Number of years to pay off two bed home
1	Singapore	Singapore	1,940.00	16,414.54	1,219,928.61	628.83	52.40
2	Seoul	South Korea	3,913.00	18,742.66	1,392,954.49	355.98	29.67
3	Hong Kong	China	6,061.00	25,577.29	1,900,904.19	313.63	26.14
4	Taipei	Taiwan	3,632.00	11,500.90	854,746.89	235.34	19.61
5	Vienna	Austria	3,655.00	7,192.73	534,563.69	146.26	12.19
6	Bangkok	Thailand	2,435.00	4,649.96	345,585.03	141.92	11.83
7	Mumbai	India	2,649.00	4,969.88	369,361.48	139.43	11.62
8	Ho Chi Minh City	Vietnam	2,264.00	3,831.77	284,777.15	125.78	10.48
9	New York	United States	7,466.00	12,281.73	912,778.17	122.26	10.19
10	Prague	Czech Republic	4,055.00	6,623.10	492,228.79	121.39	10.12

According to our analysis, Singapore is the least profitable city for buying and letting a holiday home. With the average monthly income from a two bed property on Airbnb being just £1,940 while purchase prices average £16,415, investors in this market won’t see a return for over 650 years (628.83 months).

Seoul, South Korea follows next with the potential earnings from listing a two bedroom house on Airbnb averaging £3,913 whereas buying the house itself would cost £1,392,954. This means it would take more nearly 30 years (or 356 months) to pay off the investment.

Hong Konh, China is next on the list, where holiday home owners can earn £6,061 per month from renting out a two bedroom house that would cost £1,900,904 to purchase, setting the return on investment time to more than 26 years (313.64 months).

Asia dominates the ten least profitable cities, with Vienna and Prague being the two European cities in the bottom 10, along with New York, which sits in 9th place.

Holiday homes in Las Vegas get the most sun, while Abu Dhabi sees the highest temperatures

Las Vegas ranks as the sunniest holiday home location in our list, averaging 10.48 hours per day, followed by Cairo with 9.7 hours and Dubai with 9.61 hours. However, when it comes to temperatures, Dubai averages a scorching 27ºC each day, making it the holiday home destination with the hottest weather. Singapore ranks closely behind with 26.45ºC, followed by Phuket with 26.30ºC

From analysing the data above, we can see that the best cities for buying and renting out a holiday home are in high tourism areas where the potential Airbnb rental earnings massively outweigh house prices. However, anyone considering purchasing and letting a holiday home should also be aware of yearly trends in property prices.

Methodology & Sources:

Starting with a seed list of the 100 countries with the highest number of international arrivals in 2018, we ranked each one based on the following metrics:

• The average monthly price for 2-bed Airbnb

• https://www.airbnb.co.uk/

• https://www.phillyaptrentals.com/blog/what-size-is-considered-a-big-2-bedroom-apartment/

• https://www.phillyaptrentals.com/blog/what-size-is-considered-a-large-1-bedroom-apartment/

• Destination profitability

• The profitability of destinations was determined by finding out how quickly it would take for the landlord to earn their money back if they rented it out using Airbnb and then also how much money can make once the total cost of the profitability is paid off.

• Sunshine hours

• https://en.wikipedia.org/wiki/List_of_cities_by_sunshine_duration

• Average temperature

• https://worldpopulationreview.com/country-rankings/hottest-countries-in-the-world

• Number of restaurants

• https://www.tripadvisor.co.uk/

• Number of bars

• https://www.tripadvisor.co.uk/

• The purchase cost of buying a holiday home

• https://www.numbeo.com/cost-of-living/

• Home price trends

• https://www.globalpropertyguide.com/home-price-trends

• Utility cost

• https://www.numbeo.com/cost-of-living/in/London