Over the past 150 years, real estate in large cities has yielded lower returns than real estate in smaller cities. This is according to "ECONtribute Discussion Paper No. 31", published by a team led by economist Prof. Dr. Moritz Schularick, member of the Cluster of Excellence "ECONtribute: Markets & Public Policy" at the University of Bonn.
The team not only examined yields in major international cities such as London, New York and Tokyo, but also the development in German cities such as Berlin, Frankfurt and Hamburg. They came to the conclusion that overall yields in the major cities studied over the past 150 years were on average around one percent lower than in the rest of the country.
But what is the reason for this? One of the reasons given by the researchers is that rents - in relation to purchase prices - are higher outside of metropolitan areas. Rental income and its constant development are crucial for high yields. Interested parties can access the full paper free of charge at econtribute.de.
Source: econtribute.de
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