For decades, property investors in Europe have gravitated toward the prestige addresses of Paris, Amsterdam, and Munich. But a new analysis of 2026 data from Global Property Guide, cross-checked against local portals such as Immobiliare.it, Idealista, Fotocasa, Habitaclia, and Daft, reveals a shift: the highest gross rental yields are now found in mid-sized and regional cities, particularly across Southern Europe.
Gross rental yield—annual rent divided by purchase price before taxes, maintenance, and other costs—offers a clear measure of income potential. Below are the ten eurozone cities where this figure is highest, ending with a surprising number one.
10. Rome: 7.12%
Rome illustrates a stark contrast between prestige and income. In the historic centre—around the Pantheon, Piazza Navona, and Trastevere—international competition drives prices high and yields low. A one-bedroom flat in the centro costs €472,500 but yields only 5.51% gross. Outside the core, a one-bedroom averages €225,000 and rents for €1,450 monthly, pushing yields to 7.7%. The best return comes from studios: €149,000 purchase, €1,000 rent, delivering 8.05%.
9. Dublin: 7.22%
Dublin’s chronic housing shortage keeps rents elevated. A one-bedroom flat costs €295,000 and rents for €2,000 monthly, yielding 8.14%—the city’s most profitable unit size. Across Ireland, home prices have nearly doubled since 2012 (up 99% nominally), while rents rose 71% over the same period.
8. Naples: 7.22%
Naples ties Dublin on yield but at far lower entry prices. A one-bedroom costs €145,500 and rents for €950, yielding 7.84%. The standout is the studio: €70,000 purchase, €700 rent, delivering a striking 12% gross yield—the joint-highest in the ranking. Strong student demand and year-round tourism support occupancy for smaller units.
7. Barcelona: 7.40%
Barcelona averages 7.40% across all locations, with one-bedroom units the most profitable at 7.95% (€240,000 purchase, €1,590 rent). Yet supply remains near historic lows across Catalonia, while demand from tourists, students, and remote workers persists. “Affordable apartments in Barcelona are reportedly increasingly difficult to find,” said Lalaine Delmendo of Global Property Guide. “Madrid continued to lead in absolute transaction volume, while stronger year-on-year growth was seen in several other major markets, most notably Barcelona and Seville.”
6. Riga: 7.47%
Latvia’s capital offers strong rental returns but weak long-term price growth. A one-bedroom costs €125,000 and rents for €750, yielding 7.20%; a two-bedroom at €187,000 yields 8.34%. Over the past five years, real prices in Riga have fallen 23.66%, with nominal growth of just 3.77%. The trade-off: low entry prices make rental income the primary story.
5. Turin: 7.68%
Italy’s first capital, overshadowed by Milan, combines low acquisition costs with strong student and engineering demand. A one-bedroom across Turin costs around €99,000 and rents for €850 monthly, yielding above 10% gross. In the historic centre, however, prices rise to €255,000 and yields drop to about 5.6%.
4. Jyväskylä: 8.02%
Finland’s university city is the ranking’s surprise. Located in central Finland, Jyväskylä benefits from a stable student population and relatively low property prices. The data shows an average yield of 8.02%, making it a standout in Northern Europe.
3. Vilnius: 8.10%
Lithuania’s capital offers yields of 8.10%, driven by a growing economy and affordable housing. A one-bedroom flat costs approximately €110,000 and rents for €750 monthly, yielding 8.18%. The city’s tech sector and young population support rental demand.
2. Tallinn: 8.15%
Estonia’s capital, known for its digital society, delivers 8.15% yields. A one-bedroom at €120,000 rents for €800, yielding 8.00%. The city’s strong startup ecosystem and tourism contribute to consistent occupancy.
1. Palermo: 8.20%
Palermo tops the list with an average yield of 8.20%. Sicily’s capital offers some of Europe’s lowest entry prices: a one-bedroom costs around €85,000 and rents for €600 monthly, yielding 8.47%. Studios at €55,000 with €500 rent deliver 10.91%. The city’s cultural heritage, food scene, and growing tourism sector underpin demand.
For investors, the message is clear: Europe’s best rental yields now lie outside the traditional prestige markets. Cities like Palermo, Turin, and Naples offer income-focused opportunities, while the Baltic capitals and Jyväskylä provide alternatives with different risk profiles. As urban heat islands and climate pressures reshape city living, these mid-sized markets may also benefit from shifting demographics and remote work trends.
