Europe Residential Real Estate Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

Europe's residential real estate market is expected to grow at a CAGR of 9% during the forecast period.

After more than two years since the first major outbreak of the Covid-19 pandemic and the subsequent economic downturn in European countries, the impacts have been different from those of the global financial crisis of 2008–2010.

For 2022, experts expect real estate to continue to be a focus for investment. Market experts believe the upward trend will continue and are confident it will be widespread. The recovery has been supported by the low-interest rate environment and strong economic growth. This has bolstered investor confidence, but rising inflation and the continued emergence of Covid-19 variants remain challenges. Following record results in the Multifamily sector, investors' appetite is anticipated to increase for these asset classes in 2022, and the office recovery is well underway.

From a pricing point of view, despite the general uncertainty surrounding the economy, residential markets experienced at least slight growth in most cases. An assumption that the real estate market is attractive during downturns proved to be correct, as many countries reported unprecedented demand for new housing shortly after the strictest lockdowns. Moreover, this trend is expected to continue throughout 2022, which may support further price growth.

Scope of the report

Residential real estate is an area developed for people to live on and cannot be used for commercial or industrial purposes. It emerges when land sanctioned for residential use is purchased by someone, which becomes real property and encompasses a large variety of potential dwellings, from houses to houseboats, and from neighborhood types ranging from the poorest slum to the wealthiest suburban subdivision. The report provides key insights into the European residential real estate market. It includes technological developments, trends, and initiatives taken by the government in the residential real estate sector. Also, the report offers an understanding of the key trends in the market, like factors driving the market, restraints to market growth, and opportunities for the market. Additionally, the competitive landscape of the European residential real estate market is depicted through the profiles of the key players in the market.

Europe Residential Real Estate Market is segmented by Type (Condominiums and Apartments, Villas and Landed Houses) and Country (Germany, United Kingdom, France, and Rest of Europe). The report offers market size and forecasts for the Europe Residential Real Estate Market in value (USD billion) for all the above segments.

The report also discusses the short-term and long-term impact of Covid-19 on the European residential real estate market.

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Key Market Trends

Growth in transaction prices of new dwellings

Despite the continuous convergence of European economies and close interconnections, each country's residential markets develop independently. For the first time, Austria took a leading position as the most expensive country in 2020 with a price tag of 4,457 EUR/sqm, only 36 EUR ahead of France with 4,421 EUR/sqm. The average price of over 4,000 EUR was recorded in three other countries last year – Germany, the United Kingdom, and Israel.

Norway could join this group in 2022, as prices stood at 3,956 EUR/sqm in 2020. However, it is important to mention that data for Norway include prices for detached houses only, as no other transactional information was available.

The other side of the price spectrum is dominated by Bulgaria, with an average transaction price for a new dwelling of 578 EUR/sqm, which increased by some 5% year-on-year. Bosnia and Herzegovina is the other country to remain below the 1,000 EUR/sqm price level, averaging 881 EUR/sqm.

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