Europe’s capital cities are in demand

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by Kay Murchie

Profits only come in during high season in holiday homes so many investors are looking at moving to capital cities. Capital cities have established lettings market with a large group of potential tenants who are willing to stay for long periods.

Experts say there are many problems with holiday homes but within a capital city, there at least 2 million ready and willing to rent or there are people waiting to buy your property when you sell. Another issue is the availability of airports, roads phones and shops and other facilities available in a city.

Recently, it has emerged that people are deserting the countryside to move to where the jobs and opportunities are in abundance and this usually means the capital. However, Britons seem obsessed by the holiday areas. Their perfect location is an old farm in Andalusia or Provence.

Where you choose to invest is the dilemma. Berlin is attracting a lot of international attention currently. Long term prospects are good but short term is not. Prices are low but unemployment is high and 3 million people live there but the city was built for 5 million.

Prague has become increasingly popular due to Europeans taking short weekend breaks. It has a great finance market with low base rates.

Gross rental yields of 10% can be achieved in Sofia, Bulgaria’s capital but there are high transaction costs on purchase.

Paris is underrated but does offer everything that London does – but cheaper. A sq ft would cost £1,000 in Paris but £3,000 in London.

A surprising recommendation is Nicosia, Cyprus. The Cypriot economy is doing very well at present and Nicosia is being redeveloped.

For the daring, however, Tirana in Albania could be the best long term investment.