Los Angeles Has the World’s Highest Luxury Rental Yield (2024)

Investors in Los Angeles’ luxury residential rentals had the best returns in the first half of 2019, according to a Savills report released Thursday.

In the first six months, the yield of a typical Los Angeles luxury rental property was 5.4%, outperforming the 20 other major world cities tracked by the Savills World Cities Prime Residential Rental Index.

The second and third spots were occupied by Moscow and New York, yielding 5% and 4.3%, respectively.

Rental yield is calculated by dividing annual rental income by the property's capital value/price.

On average, luxury residential rentals across the world rose 1.3% year-over-year, while the capital values slowed to 0.7% annually, according to Savills.

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“While there are variations at an individual city level, the trend across both prime rents and capital values in leading world cities is broadly stable,” said Sophie Chick, head of Savills World Research, in the report.

“Very few cities are seeing annual rental growth above 2%, a trend we expect to persist, given prevailing global political and economic headwinds,” she said.

For most Asian cities, yields remained low because capital value growth over the past decade still outpaced the rental growth. For example, Shanghai had the biggest luxury rental growth in Asia, at 4.3% year-over-year, but luxury rentals still only yielded an average 1.6% from January to June.

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New York was still the most expensive luxury rental market in the world, averaging $4,260 per week for a 2,000-square-feet rental.

Hong Kong, Tokyo and Los Angeles ranked No. 2 to No. 4, renting $3,750, $2,840 and $2,650 per week, respectively.