The best university cities in Europe to invest in student housing The two best are in Spain, Milan is only fourth

Investing in student housing is an increasingly popular real estate strategy, thanks to the stability of demand, the growth of international university flows, and the ability to generate solid medium-to-long-term returns. A recent study conducted by Compare the Market analyzed numerous economic and demographic indicators to identify the European cities with the greatest potential for investors interested in the student rental sector. Among the parameters examined were gross rental yield, the number of students in the area, the average price per square meter, and the general interest in the student housing market, also measured through online searches. The study shows that Barcelona currently represents the best opportunity in Europe. The Catalan city combines a solid student population—140,368 students enrolled across eight universities—with a rental yield of 5% per year, one of the highest on the continent. Moreover, the average price per square meter is €444.24, the third lowest among the cities analyzed. This mix of affordability and profitability makes Barcelona extremely attractive, especially in neighborhoods like Gràcia, appreciated for its cultural vibrancy and good transport connections, and Eixample, a central area with numerous student-oriented services.

Madrid ranks immediately after, thanks to the largest university population in Europe, reaching 153,714 students. The Spanish capital offers a gross rental yield of 4.78% and an average monthly rent of €1,161.86 for a one-bedroom apartment. The Moncloa-Aravaca area, close to the Ciudad Universitaria, is particularly sought after by students due to its proximity to campuses and lively social life. The neighborhoods of Malasaña and La Latina, known for their alternative atmospheres and nightlife, also offer excellent investment opportunities. Brussels, on the other hand, ranks third among the most advantageous destinations. Here, the rental yield reaches 5.22%, second only to Dublin among the cities considered, while the average price per square meter is €392.90, the second lowest in Europe. These two factors make Brussels a city with very high potential for those seeking a low-cost entry into the market with attractive returns. The city center and neighborhoods like Cimetière d’Ixelles and Dansaert have the highest student concentrations, thanks to academic institutions like Université Libre de Bruxelles and Erasmushogeschool.

Milan, the only Italian city in the top five, ranks fourth with a student population of 124,613, the fourth largest in the study. The average rental yield is 4.25%, while the monthly rent for a one-bedroom apartment is around €1,175.91. Despite higher purchase prices compared to other cities, Milan offers a vibrant and stable market, with areas like Navigli, Porta Genova, Bicocca, and Città Studi being particularly attractive to investors, due to their proximity to universities like Bocconi, Politecnico, and Università degli Studi. Lyon completes the top five with a very large student population of 147,171, the second largest in Europe after Madrid. Even if the exact rental yield is not among the highest, the city still shows strong demand, as confirmed by 2,140 monthly searches for student housing. Investors interested in the French city can find good opportunities in the neighborhoods of Guillotière, Part-Dieu, and Vieux Lyon, all well connected and close to top universities such as École Normale Supérieure and Université Jean Moulin.

But beyond the top five, the study also highlights other cities worth serious consideration. Dublin, although ranked seventh overall, has the highest rental yield at 6.7%, along with a high average monthly rent of €1,863.65. However, property costs are significantly higher compared to other cities. Athens, by contrast, stands out for having the lowest average price per square meter in all of Europe, at just €282.43, making it an extremely attractive option for those looking for a low-entry-cost investment. Berlin, meanwhile, stands out for the volume of demand: with 36,300 monthly searches for student housing, it is the city with the highest online interest, followed by Dublin and Amsterdam, with 20,700 and 19,800 searches per month respectively. According to Stephen Zeller, General Manager of Money at Compare the Market Australia, it is essential for every investor to thoroughly analyze all the factors that affect the sustainability and profitability of an investment. Choosing cities with high theoretical returns is not enough; it is crucial to consider proximity to university campuses, local market accessibility, efficient public transport, and an urban environment suited to student life.