Durban in South Africa tops a new global index comparing how long it takes to make back the value of a property via Airbnb versus the traditional rental market.
Nested, the London based online estate agent, created the 2017 Property ROI Index to better understand global variations in real estate prices from an investment perspective.
The research showed that a property in Durban, South Africa would take 167 months to recuperate value via traditional rental methods, and 18 months via Airbnb – the shortest time period worldwide.
Additionally Cape Town would take 205 months to recuperate value via traditional rental methods, and 50 months via Airbnb, positioning the city 12th worldwide, and the slowest city to recoup investment costs via Airbnb in South Africa. Johannesburg also featured.
This compares to Lagos, Nigeria where it takes the least amount of time to recuperate property value via traditional renting at 132 months, and Taipei, Taiwan where it takes the most amount of time at 693 months.
Properties in Beijing, China take the most amount of time to recuperate their value via Airbnb rental, at 714 months on average.
- Cairo, Egypt has the most affordable average cost of a 3-bed property at US$60,293;
- Hong Kong has the most expensive average cost of a 3-bed property at $2,404,789.;
- The rent for a 3 bedroom property is the most affordable in Cairo, Egypt at a monthly average of $387;
- The rent for a 3 bedroom property is the most expensive in San Francisco, USA at a monthly average of $5,437;
- Kuala Lumpur, Malaysia has the most affordable monthly average Airbnb cost at $1,664;
- Dubai, UAE has the most expensive monthly average Airbnb cost at $15,892.
Nested said that its results demonstrate which cities present the best investment possibilities for either traditional rental or sharing services like Airbnb.
To conduct the research, Nested looked at all closed property sales in the past 6 months and current market listings for all locations researched. Among other sources, data for the study comes from the record offices in each city, the World Bank, HSBC data and the Economist, as well as the Nested team’s own expert and exhaustive research.
|#||City||Avg cost of 3-bed property||Avg rent of 3-bed property||Months until value recuperated through rent||Avg monthly Airbnb rental of 3 bed property||Months until value recuperated through Airbnb|
|1||Durban, South Africa||$94 343||$565||167||$5 301||18|
|2||Lagos, Nigeria||$132 490||$1 001||132||$6 010||22|
|3||Cairo, Egypt||$60 293||$387||156||$2 624||23|
|4||Reykjavik, Iceland||$418 663||$2 203||190||$12 833||33|
|5||Johannesburg, South Africa||$158 370||$879||180||$4 754||33|
|6||Santiago, Chile||$187 448||$849||221||$5 517||34|
|7||Athens, Greece||$207 240||$537||386||$4 909||42|
|8||Bangalore, India||$113 716||$425||267||$2 497||46|
|9||Dubai, UAE||$725 013||$3 873||187||$15 892||46|
|10||Bucharest, Romania||$168 586||$642||263||$3 672||46|
|12||Cape Town, South Africa||$253 275||$1 234||205||$5 076||50|
See the full list here