Real Estate - Central & Western Europe

The Real Estate market market in Central & Western Europe is expected to reach a value of €103.90tn by 2024.
Residential Real Estate is the dominant sector in the market, projected to have a market volume of €84.92tn in 2024.
This sector is anticipated to show an annual growth rate (CAGR 2024-2029) of 3.09%, resulting in a market volume of €122.30tn by 2029.
In terms of global comparison, United States is projected to generate the highest value in the Real Estate market market, with €122.4tn in 2024.
In Germany, the real estate market is experiencing a surge in demand for sustainable and energy-efficient properties.

Definition:

The real estate market refers to the transaction of properties, including residential properties (such as houses and apartments) and commercial properties, such as office buildings and industrial properties. Apart from property sales, this market includes leases and the value of real estate.

Structure:

The real estate market comprises residential and commercial real estate. The residential real estate market covers real estate transactions and leases, and residential real estate leases are divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and real estate renters as well.

Residential real estate (houses and apartments)
Commercial real estate (office buildings, retail spaces, warehouses, industrial properties)

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Real Estate market in Central & Western Europe has been experiencing significant growth and development in recent years.

Customer preferences: Customers in Central & Western Europe have shown a strong preference for urban living, with a growing demand for properties in city centers. This is driven by various factors, including the convenience of having amenities and services within walking distance, as well as the desire to be part of a vibrant and cosmopolitan environment. Additionally, there is a growing trend towards sustainable and energy-efficient properties, with customers increasingly seeking environmentally-friendly features such as solar panels, green roofs, and energy-efficient appliances.

Trends in the market: One of the key trends in the Real Estate market in Central & Western Europe is the increasing popularity of co-living and co-working spaces. This trend is driven by the changing preferences of younger generations, who value flexibility and community engagement. Co-living spaces offer shared amenities and common areas, fostering a sense of community and providing opportunities for networking and collaboration. Similarly, co-working spaces provide flexible and affordable office solutions for startups and freelancers, who prefer to work in a dynamic and collaborative environment. Another trend in the market is the rise of mixed-use developments, which combine residential, commercial, and retail spaces in a single project. This trend is driven by the desire for integrated and self-contained communities, where residents can live, work, and socialize without having to travel long distances. Mixed-use developments often feature a range of amenities such as parks, gyms, restaurants, and shops, creating a vibrant and convenient living environment.

Local special circumstances: Each country in Central & Western Europe has its own unique set of circumstances that influence the Real Estate market. For example, in countries with strong tourism industries, such as France and Spain, there is a high demand for vacation homes and rental properties. On the other hand, in countries with limited land availability, such as the Netherlands and Belgium, there is a focus on maximizing the use of existing space through innovative architectural designs and compact living solutions.

Underlying macroeconomic factors: The development of the Real Estate market in Central & Western Europe is also influenced by underlying macroeconomic factors. Low interest rates have made borrowing more affordable, encouraging investment in the Real Estate sector. Additionally, strong economic growth in the region has increased disposable incomes and consumer confidence, leading to increased demand for properties. Finally, favorable government policies, such as tax incentives for real estate investment, have also contributed to the growth of the market. In conclusion, the Real Estate market in Central & Western Europe is experiencing significant growth and development, driven by customer preferences for urban living, the rise of co-living and co-working spaces, and the popularity of mixed-use developments. Local special circumstances and underlying macroeconomic factors also play a role in shaping the market dynamics.

Data coverage:

Figures are based on value of residential and commercial real estate, average real estate value, residential estate transactions and leases.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data from international organizations and industry associations. Next we use relevant key market indicators and data from country-specific associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Japan is a country with very limited space for buildings, as mountains make up about three-quarters of its landmass. The country’s fairly large population is concentrated in major cities. The metropolitan area of Tokyo, home to a staggering one-third of the population, is the center of economic and political activity. As such, it boasts the highest property prices across the country. Driven by the weak yen, a tourism boom, and global investment, property and land prices surged in 2023 and 2024. Even some rural regions, which are generally confronted with economic stagnation and depopulation tendencies, have been affected by this trend.

The real estate market all around the world has been affected by the global pandemic. This historic event has changed the way we live, consume, and work. The real estate market in the Asia-Pacific region has experienced some turbulent and diverse changes depending on the sector, property type, and location. The commercial real estate segment, which includes offices, retail outlets, logistics centers, and many more, had to adapt to new conditions and demands. Furthermore, residential real estate suffered decreases in rental and capital values in some areas, with the exception of prime real estate, which experienced healthy growth in most locations.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Real Estate - Central & Western Europe

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Real Estate - Central & Western Europe

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