London Edges Paris to Claim Top Spot as Most Attractive European City for Residential Investors

The 2024 Olympic Games ensured all eyes turned to Paris, but in the meantime, London quietly stole the City of Light’s crown as the most attractive European city for residential investors.

In a remarkable shift, London has overtaken Paris to become the most attractive European city for residential investors, according to PATRIZIA's 2024 European Living Cities Index. This comprehensive ranking, which evaluates 142 cities across the continent, highlights the dynamic nature of urban investment landscapes across Europe. 

Dominance of the DACH and Nordic Regions 

The 2024 rankings display strong performances from cities in the DACH (Germany, Austria, and Switzerland) and Nordic regions. While London and Paris again top the list, cities like Munich, Vienna, and Stockholm also feature prominently, reflecting their robust investment appeal. Berlin has been nudged down to fourth place by Zurich.

The residential sector remains a vital asset class for institutional investors seeking portfolio diversification and resilient income streams. Urbanisation megatrends, characterised by increasing population density and evolving living preferences, underscore the importance of strategic investments in the living sector. Cities that adapt to these trends by enhancing infrastructure, connectivity and liveability are becoming prime targets for investment. 

Insights from PATRIZIA’s European Living Cities Index 

The biannual European Living Cities Index leverages PATRIZIA’s in-house research and data intelligence capabilities to analyse cities across the continent. The Index provides a detailed assessment of each city's attractiveness and liquidity, enabling institutional investors to develop diversified European living portfolios. 

Dr. Marcus Cieleback, Chief Urban Economist at PATRIZIA, emphasises the critical role of urbanisation in shaping future investment landscapes. He notes, “We live in a world in transition where rapid urbanisation will be the defining force that shapes the future of our cities. As long-term investors, we are deeply passionate about understanding the drivers of what makes a city attractive to invest in, both now and in the future, and providing this intelligence to our global institutional investors as part of our broad mix of investment solutions.” 

Sub-Categories of the Index 

The Index ranks cities overall and evaluates them across critical sub-categories, each reflecting essential aspects of urban liveability and investment potential: 

Location Quality: Factors such as unemployment rate, average household income and green spaces. Zurich leads this category, followed by Basel and Luxembourg. 

• Connectivity: Measures transportation amenities, average travel time to work and car-to-work ratio. Vienna tops this category, with Bratislava and Helsinki following. 
• Market Fundamentals: Core demographic data, including population size, working population ratio, and number of households. London ranks highest, with Paris and Berlin close behind. 
• Innovation: Evaluates student population, patent applications, and youth ratio. Paris leads, followed by London and Munich. 

Cities in the DACH region, particularly in Germany and Switzerland, dominate the sub-categories, with notable performances in innovation and connectivity. The Nordic region also excels, with cities like Copenhagen, Oslo and Stockholm consistently ranking in the top 10 across various metrics. 

Methodology of the European Living Cities Index 

First produced in 2017, the PATRIZIA Living Cities Index analyses 48 indicators to provide a nuanced understanding of urban investment potential. Data sources include the Eurostat Urban Audit, the United Nations, and Oxford Economics. The Index assesses economic strength, location quality, connectivity, innovative capacity, and other metrics related to liveability, quality of life, ESG, and sustainability. 

PATRIZIA leverages advanced AI and data analytics tools, such as the PATRIZIA Amenities Magnet, to enhance its analysis. These tools assess each city’s quantity and quality of amenities, providing a comprehensive rating that supports informed investment decisions. 

London Takes the Gold Medal 

London's rise to the top spot in PATRIZIA’s 2024 European Living Cities Index underscores its enduring appeal to residential investors. With strong performances from cities across the DACH and Nordic regions, the Index highlights the importance of understanding diverse urban dynamics to optimize investment strategies. As urbanisation continues to shape the future, cities that adapt and innovate will remain prime targets for institutional investment, ensuring resilient and diversified portfolios for global investors.