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

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

Europe's residential real estate market is expected to grow at a compound annual growth rate of 9% during the forecast period. The European residential real estate market continues to grow at an impressive rate and this year the market has seen significant growth in demand from a wider range of global investors. Investors are attracted to the stable income profile, improved diversification, and possibilities of building scale in the long term.

Many residential projects were delayed or canceled due to the COVID-19. The outbreak of the COVID-19 pandemic has brought serious uncertainty to suppliers and contractors throughout the European residential real estate market. Residential markets across Southeast Europe have recovered strongly since the start of the COVID-19 pandemic, though prices remain the lowest in Europe.

Residential real estate market in the region experienced a dramatic slowdown in activity during the initial spring lockdowns, but this was followed by a rebound in transactions later in the year, and, in many cases, fresh interest in houses and properties away from major cities. In the already expensive major cities both purchase prices and rents continued to rise, although the momentum of price increase in very central locations flattened out slightly.

Key Market TrendsIncrease in Residential Properties Construction in Europe

The gross residential mortgage lending in selected European countries from the first quarter of 2019 to the fourth quarter of 2020 varied over time. In the second and third quarters of 2020, Germany surpassed the United Kingdom by volume of gross residential mortgage lending. Amidst the coronavirus (COVID-19) crisis, new mortgage loans fell in most European countries but continued growing in Germany and the Netherlands. By the fourth quarter of 2020, however, the United Kingdom surpassed Germany once more. This statistic illustrates the number of residential property construction starts per 1,000 citizens in selected countries of Europe in 2020, broken down by country. It can be seen that the country with the largest number of homes starts per thousand citizens was Romania at that time, with a total of 7.52 houses construction starts per thousand citizens. Poland ranked second during that time, with 5.85 houses starts for every thousand people as of 2020.

Stable Homeownership Share Across Europe

More developed European countries, such as France or Germany, tended to have a lower homeownership rate compared to the frontier countries, such as Lithuania or Slovakia. The share of house owners among the population of all 28 European countries has remained relatively stable over the past few years. Across Europe, the average transaction price varies from country to country. The average transaction price per square meter for a new dwelling was more than three times higher in United Kingdom compared to the likes of Poland and Hungary. As the most populous country in the European Union, Germany also provided the greatest number of houses on the continent. In 2020, there were 42.84 million housing units in the country, translating into 514.91 homes per 1,000 citizens.

Competitive Landscape

There is huge competition between the residential real estate companies in Europe. The market is dominated by a few players. The sales proportion of residential real estate properties through online channels has consistently grown, owing to the rising internet penetration, growing demand, increasing personal disposable incomes, surging middle-class youth population, and opportunities offered by government infrastructure investments.

Major real estate players in the market are Elm Group, Places for People Group Limited, LEG Immobilien AG, Consus Real Estate AG, and CPI Property Group.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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