The strongest property investments are often made in cities, where the rental demand is strong and capital growth usually robust.
But which are the best cities around the world to invest in property at the moment? The latest annual Schroders Global Cities 30 Index from the London bank aims to tell us just that.
The surprise winner this year is Los Angeles. Up five places from sixth spot in the 2016 index, the Californian film capital pushed London into second place.
Primarily known for the film business, Los Angeles has begun spreading its wings and is attracting a lot of the new start up technology companies. A strong influx of Chinese capital building real estate has also helped propel the city to top spot on the list.
Tom Walker, co-head of global real estate at Schroders, said: ‘The scale and economic depth of LA makes it a compelling location to work and live. One of its key economic strengths is that it doesn’t have to rely on only one industry.
‘The technology sector, in particular, has grown substantially over the past few years, and this has not only boosted demand for office space but also for residential property, much of it due to the increased hiring of Millennials.’
Boston, Chicago and New York followed London, to make the top five dominated by US cities.
America also dominated the main index, taking up 18 out of the top 30 places.
The leap from 24th to 3rd place for Boston was certainly the most impressive rise in the index from last year. This was put down to colleges and career opportunities in the city.
Chicago also rose strongly from 10th to 4th place, whilst New York retained its fifth spot in the index.
The rest of the top ten was made up by Hong Kong, Houston, Melbourne, Singapore and Shanghai.
The Schroders Index uses a number of factors to identify the most economically vibrant cities; including population, median household income, university ranking, retail sales and gross domestic product (GDP)
It is mainly used by wealthy, global real estate investors and by institutional firms looking for the best long-term value for fixed asset investments. However, it can be a good indication to smaller real estate investors as to which cities are worth investing in around the world.
Top Ten Cities for Property Investment
1 – Los Angeles
2 – London
3 – Boston
4 – Chicago
5 – New York
6 – Hong Kong
7 – Houston
8 – Melbourne
9 – Singapore
10 – Shanghai