The Best Cities For Owning Vacation Homes

best place to have a holiday home

Experts at Highland Cabinetry analyzed 25 cities in the world, to determine the places with the most benefits of owning a vacation house.

To ensure a balanced evaluation of each city’s potential for vacation home investment, the study considered metrics such as average price of houses per m², number of visitors to the cities, safety Index, pollution index, climate index as well as quality of life.

Another metric included is the rental income (outside and in center), comparing potential income from properties located outside the city center versus central locations, if the owners decide to give the house out for rent. Also, unemployment rate was determined as an indicator of economic stability and job market health. The data was retrieved from the latest reports on Numbeo, and Statitsa, as well as governmental websites of each city. 

Each city was scored on a scale of 1 to 100, with the final rankings reflecting a comprehensive assessment of these metrics.

Rental Income Potential from 1 bedroom apartment 
RankCityAverage Price per m²Visitors per yearSafety indexPollution indexClimate indexQuality of LifeOutside of the centerIn centerUnemployment  rateOverall score (1-100)
1Malaga, Spain$3,202.3414,000,00071.329.2396.98189.05$838.26$1,033.2016.49%74.83
2Valencia, Spain$3,009.272,300,00070.124.693.8199.2$878.88$1,128.8911.79%69.63
3Dubrovnik, Croatia$3,829.341,500,00079.923.4593.24167.48$540$695.256.90%68.02925
4Porto, Portugal$3,366.073,100,0006824.796.6182$893.61$1,106.826.01%67.46
5Gold Coast, Australia$3,944.4012,000,00053.123.5497.73198.77$1,385.05$1,504.163.30%67.24
6Alicante, Spain$2,264.134,000,00069.737.9995.25183.31$675$949.2710.20%66.97819
7Algarve, Portugal$3,532.705,000,00066.1422.9997.36153.25$918.40$1,080.479.60%64.62
8Lisbon, Portugal$3,436.775,986,63870.1435.1298.59153.25$990.54$1,435.746.60%64.32
9San Diego, California, USA$8,277.8431,800,00059.83997.1161.7$2,357$2,779.284.10%62.59
10Split, Croatia$4,891.86900,00068.726.5796.3173.29$526$702.986.96%61.68417

Malaga tops our list with an overall score of 74.83. This city is characterized by an average property price of $3,202.34 per m² and attracts 14 million visitors annually. The high quality of life score of 189.05 and the highest climate index of 96.98 make Malaga a prime location. Additionally, rental income potential is strong, with average rents at $838.26 outside the center and $1,033.20 in the center. Malaga’s safety index of 71.3 and low pollution levels of 29.23 contribute to its advantages of owning a vacation house.

Valencia, with a score of 69.63, holds the second position, for its balanced affordability and the highest quality of life at 199.2. The average property price is $3,009.27 per m², second lowest in the list. Valencia’s pollution index of 24.6, lower than Malaga, and second lowest overall, makes Valencia a desirable place to own a property in. 

Dubrovnik, Croatia ranks third with a score of 68.03, driven by its strong safety index of 79.9 and second lowest pollution index of 23.45. The city’s average property price is $3,829.34 per m², with potential rental income at $540 for outside the center and $695.25 in the center properties. 

Porto, Portugal is fourth with an overall score of 67.46. The city attracts 3.1 million visitors annually and has an unemployment rate of only 6.01%, third lowest in the list. Rental incomes are favorable, with $893.61 for outside the center and $1,106.82 in the center properties.

The Gold Coast holds the fifth place, marked by its second highest rental income potential at $1,385.05 outside, $1,504.16 in the center, and second highest quality of life at 198.77. The city has the second highest climate index at 97.73 and lowest unemployment rate of 3.30% , both contributing to the attractiveness of buying a property. With 12 million visitors annually, the Gold Coast remains a central destination for vacation home investment.

Alicante, Spain achieves the sixth position, offering the lowest average property price of $2,264.13 per m². The city stands out with the lowest pollution index of 22.99, which makes it an attractive destination for those interested in owning a vacation property. The city attracts 4 million visitors per year and has a quality of life score of 183.31. 

With a score of 64.62, the Algarve, Portugal is the seventh, offering an average property price of $3,532.70 per m². In case the owners decide to rent the house out they will have rental incomes of $918.40 for outside and $1,080.47 in the center properties. The region’s safety index of 66.14 and its third highest climate index of 97.36 are strong points contributing to the city’s ranking. 

Lisbon, Portugal ranks eighth, with an average property price of $3,436.77 per m². The city sees nearly 6 million visitors annually and offers rental incomes of $990.54 outside the center and $1,435.74 in the center. Compared to Algave, Lisbon has a slightly higher pollution rate at 35.12, but also the overall highest climate index at 98.59,  presenting a well-rounded investment opportunity for homebuyers.

San Diego, California, USA holds the ninth position with an overall score of 62.59. It features the highest property price in our study at $8,277.84 per m² and significant rental income potential with $2,357 for outside the center properties and  $2,779.28 for in the center ones. San Diego is a hotspot for tourists, with 31.8 million people visiting annually, the largest number in the list. Having the second lowest unemployment rate of 4.10% the city offers a high-cost but potentially profitable market.

Split, Croatia rounds up our top ten list, with higher than average property price of $4,891.86 per m² and lower than average rental incomes of $526 for outside the center and $702.98 for in the center properties. With 900,000 visitors annually, Split presents a moderate but attractive investment option.

A spokesperson from Highland Cabinetry commented on the study “As the vacation season is upon us, Malaga proves to be the best place to visit and own a vacation house. Investing in a vacation home requires considering a wide range of metrics, from property prices and rental income potential to safety and climate. Malaga excels across these areas, offering an excellent balance of affordability, quality of life, and rental returns. Overall, our study underscores the importance of a holistic approach when selecting a vacation home destination, considering not just the financial aspects but also the lifestyle and environmental factors that contribute to the overall desirability of the location.”

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