Europe Residential Real Estate Market Size

Europe Residential Real Estate Market Analysis

The Europe Residential Real Estate Market size is estimated at USD 1.95 trillion in 2024, and is expected to reach USD 2.43 trillion by 2029, growing at a CAGR of 4.5% during the forecast period (2024-2029).

• The demand for affordable residential real estate is increasing, thus driving the market. Furthermore, there is a significant price rise in the market; hence, investors are showing interest in investing in the market.
• For instance, in 2022, according to experts, real estate was expected to continue to be a focus for investment. Market experts believe the upward trend will continue and are confident of widespread adoption. The low-interest rate environment and strong economic growth have supported the recovery. It bolstered investor confidence, but rising inflation and the emergence of COVID-19 variants remained significant 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.
• Like other real estate assets, the European residential market has gradually shifted due to the health crisis. The two main trends affecting real estate over the past several years are the demand for space, which has led to larger homes and flats, and the return to nature, which has resulted in a move from the city to the countryside. The multifamily real estate model, which is currently booming in the Italian market, is a new trend that is also starting to emerge.
• From a pricing point of view, residential markets are experiencing slight growth in most cases despite the general uncertainty surrounding the economy. Many countries have 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.
• Following a 5% annual growth in Q1 2022, the number of outstanding residential mortgages grew by 4.2% in Q2 2022 when compared to the same period of the prior year. The most recent data on gross home lending, according to data, the total value has dropped by -1% annually (compared to Q2 2021), ending a 5-quarter streak of steady year-over-year development. Gross lending as a whole reached about EUR 395 billion (approx USD 423.56 billion), the greatest level since Q2 2021.
• The recent geopolitical developments in Europe impacted the activity, which resumed after being disrupted by the epidemic for several years, and the inflation rate reached its highest level in several years (+5.3% over the last year). The residential real estate market is also significantly impacted. In Q4 2021, mortgage rates in the Eurozone remained steady at 1.31%, historically low. In 12 nations, the transactions number is increasing by an average of 17%, while residential rental values have increased by 1.8% in the past year.