Real Estate - Europe | Statista Market Forecast

The Real Estate market market in Europe is anticipated to reach a staggering value of US$174.50tn by the year 2024.
Among the various segments within the market, Residential Real Estate stands out as the dominant force, with a projected market volume of US$143.70tn in the same year.
Looking ahead, the market is expected to display a steady annual growth rate, specifically a Compound Annual Growth Rate (CAGR) of 3.02% from 2024 to 2029, resulting in a market volume of US$202.50tn by 2029.
In the global context, United States takes the lead in generating the most value in the Real Estate market market, with an estimated worth of US$132.0tn in 2024.
In Spain, the real estate market is experiencing a surge in demand for coastal properties due to the country's attractive climate and affordable prices.

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 Europe is experiencing significant developments and trends, driven by various factors such as customer preferences, local special circumstances, and underlying macroeconomic factors.

Customer preferences: In recent years, there has been a growing preference among customers in Europe for sustainable and energy-efficient properties. This shift in preference can be attributed to an increasing awareness of environmental issues and a desire to reduce carbon footprints. As a result, there has been a rise in the demand for eco-friendly buildings and green spaces in European cities.

Trends in the market: One notable trend in the European Real Estate market is the urbanization of rural areas. Many European countries are witnessing a migration of population from rural to urban areas, leading to a higher demand for housing in cities. This trend is driven by factors such as better job opportunities, access to amenities, and a desire for a more vibrant lifestyle. Another trend in the market is the rise of co-living and co-working spaces. With the increasing number of freelancers and remote workers in Europe, there is a growing demand for flexible and community-oriented spaces. Co-living and co-working spaces provide individuals with the opportunity to live and work in a collaborative environment, fostering creativity and networking.

Local special circumstances: Each country in Europe has its own unique set of circumstances that influence the Real Estate market. For example, in countries like Spain and Portugal, there has been a significant increase in foreign investment in the Real Estate sector. This is driven by factors such as attractive property prices, favorable tax policies, and a growing tourism industry. In countries like Germany and Switzerland, there is a strong focus on rental properties. This is due to cultural factors and a preference for flexibility among the population. As a result, the rental market in these countries is thriving, with a high demand for affordable and well-maintained rental properties.

Underlying macroeconomic factors: The Real Estate market in Europe is also influenced by underlying macroeconomic factors. For instance, low interest rates in many European countries have made it more affordable for individuals and businesses to borrow money for property investments. This has led to an increase in property purchases and construction activities. Furthermore, economic growth and stability in Europe have attracted foreign investors to the Real Estate market. The continent offers a safe and reliable investment environment, with opportunities for capital appreciation and rental income. In conclusion, the Real Estate market in Europe is evolving in response to customer preferences, local special circumstances, and underlying macroeconomic factors. The demand for sustainable properties, urbanization of rural areas, and the rise of co-living and co-working spaces are shaping the market. Additionally, each country in Europe has its own unique set of circumstances that influence the Real Estate market. Overall, the market is driven by factors such as low interest rates, economic growth, and stability, making it an attractive investment opportunity for both domestic and foreign investors.

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 - Europe

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