Ever since Dick Whittington fell for the story that the streets of London were paved with gold, cities have exerted a strong gravitational pull. Gold may not be in abundance but culture is on tap, the populations are often cosmopolitan and youthful, and opportunity can often be found around every corner.
© Eric Nathan/Alamy
Cities occupy two per cent of the earth yet are home to 53 per cent of the world's population, a figure predicted to reach 75 per cent by 2050.
For discerning overseas home buyers, too, cities have become more attractive. While sun, sea and sand were once the overwhelming reasons to buy abroad, figures from Knight Frank show that 37 per cent of second homes are now in cities. At the same time, buyers are more concerned than ever about rental returns, eager to find property to enjoy that will also provide some income. So where are the cities that combine alluring lifestyle with a potential rental jackpot?
Recent research from rental website holidaylettings.co.uk on the best-performing overseas cities for rental occupancy show New York, Paris and Rome are the winners, achieving up to 45 weeks a year. That compares with prime summer sun destinations, such as Ibiza, where the occupancy norm is closer to 12 weeks.
"Both Paris and St Tropez have good renting seasons but while the season in southern France is April to October, Paris will perform better year-round," says Kate Stinchcombe-Gilles from Holiday Lettings. "Good quality, well-located city apartments attract weekenders in any month."
Savills latest global research also demonstrates the strength of rental returns in the world's most-visited cities. New York and Paris are not seeing the stellar capital growth of New World cities such as Hong Kong or Singapore, yet they out perform those cities for rental yields. "Our research shows average yields in New York and Paris are 6.2 per cent and 4.6 per cent respectively," says Yolande Barnes of Savills Residential Research.
"Comparable property prices in Hong Kong are almost twice as expensive but rental yields are 3.1 per cent. New York property in particular looks good value at present with capital values still 15 per cent below their 2007 highs."
New York - it's up to you
The housing market in the US is bad, acknowledges Elizabeth Stribling of Savills Stribling, with New York prices back to levels last seen in 2005 - but the Big Apple has ridden out the storm better than elsewhere.
"New York has had few foreclosures and most buyers are cash purchasers," she adds. "The cheaper dollar, coupled with more affordable prices than London or Paris, help the market."
Today, a third of all new condo developments in New York are purchased by non-US buyers. They include Chinese who buy near universities for their children, Russians who choose large trophy properties, and hip Europeans spending £640,000 in Brooklyn.
Stribling has a two-bedroom apartment in Midtown Manhattan for £800,000, while across the East River in Brooklyn an airy three-bedroom apartment is £587,265. A handsome two-bedroom apartment close to the green expanse of Central Park is £612,755 through Sotheby's.
Weak Euro boosts Paris
International demand is also driving the market in Paris where the weak euro is encouraging South Americans and Russians to snap up property. The city's compact historic centre and a lack of new developments conspire to keep the supply of accommodation low and prices high.
"Look at the edge of the Marais in the 4th arrondissement, the southern end of the 6th towards Luxembourg Gardens and the borders of the 1st and 2nd to find value," suggests Mark Harvey of Knight Frank. "But keep in mind that property in the more edgy spots may have shabby communal areas. Ask who manages the building, and whether there is a sinking fund for renovation to avoid facing a large bill for repairs."
Chesterton Humberts has a two-bedroom apartment in the prestigious 8th arrondissement reduced from £546,000 to £511,300. A one-bedroom penthouse close to the Louvre is £563,000 with Knight Frank. Rental yields are strong but owners should remember, properties let for less than a year require a permit.
Homes in vibrant Rome
A well-located Rome apartment rents for 40 weeks each year according to Holiday Lettings figures, with Trastevere and the Centro Storico particularly popular. Average square-foot prices are £950 to £1,210 with an elegant two-bedroom apartment in atmospheric Campo de'Fiori priced £1.17 million, through Knight Frank.
"The Centro Storico is vibrant but noisy," says Cristina Casacci of Knight Frank. "Parioli Pinciano, an upmarket residential area north-west of the centre with early 1900 buildings is more peaceful." Expect to pay from £433,400 for a compact 540 sq ft flat in this hilly part of Rome close to the shady pine trees of Villa Borghese.
A high-ceiling, two-bedroom apartment there is £953,480 through Knight Frank. Near the Tiber in a period building on the grand Via Banchi Nuovi, Casa Travella has a 740sq ft second-floor apartment in a period building for £736,780.
* Savills: (020 7016 3740);
* Knight Frank: (020 7869 8171);
* Holiday Lettings: (01865 312010);
* Savills Stribling: (020 7016 3740);
* Sotheby's: (+1 212 606 7769);
* Casa Travella: (01322 660988).