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Top Countries for Real Estate Investment in 2023

Nowadays, real estate investors have the possibility to invest in thousands of properties around the world but identifying the best investment opportunities can be a very challenging task. There are many factors that determine the attractiveness of an investment. Some of the most important factors are the location of the property, its price, rental yield, the interest rate environment and the demographics of a country or city.

In this post, we will focus exclusively on the rental yields in big cities. We analyzed rental yields in 2023 on residential real estate in the 20 biggest countries (based on GDP, excluding the US) and more than 120 cities.

Here is what we discovered:

- The median rental yield (city center) in 2023 is 3.87%

- Rental yields are lowest in South Korea (1.1%), China (1.61%) and Taiwan (1.83%)

- Rental yields are highest in Saudi Arabia (8%), Mexico (7.6%) and Turkey (5.83%)

- There is a high variation in rental yields across countries (up to 7%)

- It is possible to find properties with gross rental yields above 5% only in a  few countries

Please, be aware that a higher rental yield does not guarantee a higher total return on investment. For instance, two theoretically identical properties in Germany and Turkey would have very different risk profiles and drivers of returns (yield vs price change). Rental yields in some countries are high because of higher political risk, economic instability, inflation and other factors.

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