Europe luxury real estate market outlook for 2024 and trends

The European luxury real estate market is a dynamic and complex sector influenced by many economic and geopolitical factors. As 2024 progresses, investors, buyers, and industry professionals need to understand this market’s current trends and future outlook. 

This comprehensive analysis will analyze various European luxury real estate market aspects, highlighting key regions, economic factors, investment opportunities, and emerging trends.

 

Current Trends in the European Real Estate Market

Despite the economic uncertainties brought about by the COVID-19 pandemic, the European luxury real estate market has shown remarkable resilience. As we progress through 2024, several trends are shaping the landscape of luxury real estate across the continent.

Analysis of Key Europe Luxury Real Estate Markets: Germany, France, and the UK

Germany, France, and the UK remain pivotal players in the European luxury real estate market in 2024 and in the last decade. Germany’s stable economy and strong demand for high-end properties, especially in cities like Berlin and Munich, continue to drive growth. 

According to Statista, Germany’s real estate market is expected to grow by 4.4% by the end of 2024, with luxury properties experiencing a significant surge. If you are considering investing in real estate in Germany, now is the right moment. As specified by the German Federal Statistical Office, the prices of residential properties have been in constant fall for the last two years and have decreased by an average of -7.1% compared with the 4th quarter of 2022

France, with its rich cultural heritage and world-renowned lifestyle, remains a top destination for luxury real estate, offering a unique and alluring investment opportunity. Paris, in particular, continues to attract high-net-worth individuals seeking prime real estate. According to recent research by Next Move Strategy Consulting, the French real estate market, valued at USD 493.6 million in 2023, is projected to grow to USD 598.9 million by 2030. This represents a compound annual growth rate (CAGR) of 2.8% from 2024 to 2030.

The UK’s real estate market, especially in London, has faced challenges due to Brexit. However, it remains a strong contender in the luxury segment and has a promising growth trajectory. The UK residential real estate market is estimated to be worth USD 360.27 billion in 2024 and is anticipated to reach USD 476.46 billion by 2029, experiencing a compound annual growth rate (CAGR) of 5.75% throughout this period, as per Mordor Intelligence.

Analysis of Eastern European Markets and Montenegro's Rising Appeal

Eastern Europe, particularly Montenegro, is gaining traction in luxury real estate. Montenegro’s unique blend of natural beauty, favourable tax policies, and a burgeoning tourism sector make it an attractive destination for luxury property investments. The relatively low cost of living in Montenegro in 2024 compared to Western Europe further adds to its appeal.

Montenegro: A Luxury Haven

The country’s strategic location, along with its increasing reputation as a luxurious yet affordable destination, has positioned Montenegro as a critical player in the Eastern European luxury real estate market.

The Synchro Yards luxury complex in Porto Montenegro marina is set to redefine high-end living in the region. Offering state-of-the-art amenities and unparalleled views of the Adriatic Sea, this development is expected to attract a significant number of foreign investors, further boosting Montenegro’s real estate market. 

This Adriatic country has seen continuous growth in real estate prices, and an increasing number of investors are interested in Montenegro’s properties. You can read this Montenegro luxury real estate market overview and decide based on the facts you find there.

Croatia: Coastal Charm and Investment Opportunities

Croatia, with its stunning Adriatic coastline and historic cities like Dubrovnik and Split, has also emerged as a prime location for luxury real estate. The country offers a mix of modern and traditional properties, attracting investors and second-home buyers looking for scenic beauty and a Mediterranean lifestyle. 

The Croatian real estate market has shown steady growth and is driven by tourism and foreign investments. Luxury villas and waterfront properties are particularly in demand, with prices expected to rise in 2024 due to limited supply and high demand.

Czech Republic: Booming Urban Markets

The Czech Republic, especially Prague, has become a hotspot for luxury real estate. The city’s well-preserved architecture, high quality of life, and vibrant economy attract a diverse range of buyers. Luxury apartments in historic buildings and new high-end residential projects are highly sought after. 

The Czech Republic’s strong economic fundamentals, coupled with its ideal European location, enhance its appeal as an investment destination. The luxury real estate market is expected to grow steadily in 2024, supported by increasing international interest and a thriving local market, presenting a promising investment opportunity.

According to Statista, the Czech Republic’s real estate market is expected to reach a value of $1.92 trillion in 2024. Furthermore, the market is expected to experience a CAGR of 3.58% from 2024 to 2028, resulting in a market volume of $2.21 trillion by 2028.

Where is Real Estate Most Expensive in Europe?

Regarding luxury real estate, several European cities are known for high property prices, driven by demand from wealthy buyers seeking prime locations, historical significance, and top-tier amenities.

London, United Kingdom

London consistently ranks among the most expensive real estate markets in Europe. The city’s luxury properties, particularly in areas like Kensington, Chelsea, and Mayfair, attract a global elite willing to pay premium prices. 

Factors contributing to London’s high real estate prices include its status as a financial hub, cultural capital, and educational centre. According to Knight Frank’s Wealth Report 2023, the average cost per square meter in prime central London exceeds €17,000

Paris, France

Paris is another city with some of Europe’s highest real estate prices. The French capital’s allure lies in its iconic architecture, cultural heritage, and world-class amenities. Prime areas like the 6th and 7th arrondissements, home to landmarks like the Eiffel Tower and the Luxembourg Gardens, command exceptionally high prices. 

According to a 2023 report by Statista, the average cost per square meter in prime Parisian locations is around €15,000. The city’s charm and consistent demand from international buyers ensure that Paris remains at the top of the luxury real estate market.

Geneva, Switzerland

Geneva stands out for its exclusivity and high property prices, driven by the presence of numerous international organisations, financial institutions, and wealthy expatriates. Stunning lakefront properties and elegant mansions characterise the city’s luxury real estate market. 

According to UBS’s Real Estate Bubble Index 2023, Geneva is one of the priciest cities in Europe, with average prices for high-end properties reaching over €20,000 per square metre. Switzerland’s stable economy, political neutrality, and high quality of life further enhance Geneva’s appeal to luxury buyers.

Monaco

While not part of the EU, Monaco deserves mention for its astronomical real estate prices. The principality’s limited land area and its status as a tax haven drive demand for luxury properties to unparalleled heights. 

According to Savills, the average price per square meter in Monaco’s prime areas can exceed €50,000. Monaco’s exclusivity, glamorous lifestyle, and advantageous tax policies make it a top choice for ultra-high-net-worth individuals.

Europe Real Estate Market - Comparison by Property Sectors

The European real estate market is diverse, encompassing various property sectors. The residential sector remains the most significant, driven by urbanisation and rising demand for luxury homes. Commercial real estate, particularly office spaces and retail properties, also show positive growth trends.

Residential Real Estate

The residential real estate sector in Europe is diverse, ranging from high-end luxury apartments in major cities to affordable housing in suburban and rural areas. This sector has shown resilience, even during economic downturns, due to the constant demand for housing. 

Key Trends and Outlook:

Urbanisation: Cities like London, Paris, and Berlin continue to attract a growing number of residents, driving demand for residential properties. Urbanisation trends are influential in countries with robust job markets and high quality of life.

Luxury Market: The luxury residential market is booming in cities such as Monaco, Geneva, and Vienna, where prime locations and high-quality amenities command premium prices. Developments like Porto Montenegro’s Synchro Yards cater to affluent buyers seeking exclusivity and top-tier living standards.

Sustainability: There is an increasing focus on sustainable and energy-efficient housing. Green building certifications and eco-friendly features are becoming more common, appealing to environmentally conscious buyers.

According to a 2023 report by Savills, residential property prices in prime European cities are expected to grow by an average of 5% in 2024, driven by continued demand and limited supply.

Commercial Real Estate

The commercial real estate encompasses office buildings, business parks, and mixed-use developments. Economic conditions, business investments, and employment rates heavily influence this sector.

Key Trends and Outlook:

Office Spaces: The demand for office space has been evolving, particularly in the wake of the COVID-19 pandemic. Hybrid working models have led to a shift in office space requirements, with a focus on flexible and coworking spaces. Major cities like London, Paris, and Frankfurt continue to be key hubs for commercial real estate investments.

Tech and Innovation: Cities such as Berlin and Dublin are emerging as technology and innovation hubs, attracting tech companies and startups. This trend is driving demand for modern office spaces with advanced technological infrastructure.

Sustainable Buildings: There is a growing emphasis on green buildings and sustainable commercial properties. LEED and BREEAM certifications are becoming standard in new developments, appealing to companies committed to corporate social responsibility.

Commercial Hubs: Locations like Amsterdam and Warsaw are seeing significant commercial real estate development due to their strategic locations, excellent infrastructure, and business-friendly environments.

According to Technavio’s 2023 report on the European commercial real estate market, the sector is expected to grow at a CAGR of 6.08% from 2023 to 2028, driven by economic recovery and increased business activity.

Retail Real Estate

The retail real estate sector includes shopping centres, high-street retail, and retail parks. It has undergone significant transformation due to changing consumer behaviour and the impact of digital commerce.

Key Trends and Outlook:

E-commerce Influence: The rise of e-commerce has led to a shift in retail real estate, with many traditional brick-and-mortar stores adapting to omnichannel strategies. Retailers are focusing on creating experiential spaces to attract customers.

Prime Locations: High street retail in major cities like London, Paris, and Milan remains in demand, with luxury brands and flagship stores occupying prime locations. These areas command high rents but offer significant foot traffic and brand visibility. A luxurious marina in Porto Montenegro became one of the most popular places of this sort for those with sophisticated tastes. 

Retail Parks: Out-of-town retail parks are gaining popularity, offering convenience and a more comprehensive range of stores. Countries like Spain and Portugal are seeing growth in this segment, with developers focusing on creating accessible and attractive retail destinations.

Experiential Retail: There is a growing trend towards experiential retail, where stores offer unique experiences beyond just shopping. This includes interactive displays, in-store events, and personalised services to enhance customer engagement.

Retail properties, while facing challenges due to changing consumer behavior, are adapting by incorporating mixed-use developments and experiential retail spaces. These trends are expected to continue into 2024, with a focus on sustainability and innovation.

The Impact of COVID-19 on the European Luxury Real Estate Market

The COVID-19 pandemic has profoundly impacted the global real estate market, including the luxury segment. Initially, the pandemic caused a slowdown in transactions and construction activities. However, the market has shown resilience, with a notable shift towards properties that offer more space and better amenities.

The first wave of the COVID-19 pandemic saw a divergence between real and nominal housing dynamics in the euro area. Containment measures and voluntary social distancing led to a 3.1% decline in housing investment by Q3 2020, comparable to previous crises. 

There was significant variation across countries, influenced by the restrictiveness of measures, fiscal support, and demographic factors. Lower-income households were less willing to purchase homes, while medium and higher-income households showed increased interest due to accumulated savings.

The housing market demonstrated resilience during the second and third waves. House prices continued to rise despite tighter restrictions, with a 6% annual increase in Q4 2020 and Q1 2021. Housing investment recovered to near pre-crisis levels. Fiscal and monetary policies, favourable financing conditions, and the increased attractiveness of housing as an investment supported this resilience. 

Fiscal measures included short-time work schemes, tax cuts, and support for firms, while monetary policy actions like the Pandemic Emergency Purchase Programme (PEPP) and targeted longer-term refinancing operations (TLTRO III) helped maintain low lending rates. Demand for housing loans remained robust, particularly for less risky households, with historically low bank lending rates. Bank lending conditions for the construction and real estate sectors were more favourable than those affected by the pandemic.

Which European country is best for property investment?

When evaluating what is the best country to invest in Europe, several factors come into play, including economic stability, market growth potential, and regulatory environment. Here, we analyse some of the best countries for property investment in 2024.

Montenegro: The Rising Star

Why invest in Montenegro? Montenegro is emerging as a hidden gem in the European real estate market. The country’s scenic landscapes, coupled with affordable property prices and low living costs, make it an attractive destination for investors. Relatively low taxes in Montenegro and a growing tourism sector contribute to this country poising for significant growth in 2024 and beyond.

Can foreigners buy property in Montenegro? The answer is yes! The government of Montenegro encourages foreigners to invest in its real estate and offers favourable conditions to all who decide to do so.

Learn the latest real estate trends in the Montenegro market to explore the real estate world in this country a little deeper.

Germany: A Strong Contender

Germany stands out as a top destination for property investment due to its robust economy and high demand for real estate. Cities like Berlin, Munich, and Frankfurt offer lucrative opportunities for investors, with property values steadily increasing. The country’s stable political environment and transparent legal system further enhance its appeal

France: Timeless Elegance

With its diverse real estate market, France offers something for every investor. Paris remains a prime location for luxury properties, while regions like the French Riviera and Provence attract those seeking vacation homes. The French government’s favourable tax policies for property investments also make it an attractive option.

Economic factors influencing the market

Economic factors significantly shape the real estate market, and in 2024, several key elements are anticipated to impact the European luxury real estate sector.

Interest Rates and Mortgage Availability

Interest rates are a critical determinant of real estate market dynamics. In recent years, historically low interest rates have fueled property demand across Europe. However, as central banks consider tightening monetary policies to combat inflation, interest rates are expected to rise gradually. This could impact mortgage affordability and influence buying decisions.

Inflation and Property Prices

Inflation is another significant factor affecting property prices. In 2024, inflation rates across Europe are expected to vary, with some countries experiencing higher rates than others. According to Statista, Eurozone inflation was around 2.4% in March of 2024. Higher inflation rates can lead to increased construction costs and higher property prices, impacting the affordability of luxury real estate.

Here is the table of the inflation rate (in percents) by country:

Country – Last – Previous – Reference

  • Albania – 2.1 – 2.2 – Jun/24
  • Austria – 3.0 – 3.4 – Jun/24
  • Belarus – 5.8 – 5.7 – Jun/24
  • Belgium – 3.74 – 3.36 – Jun/24
  • Bosnia and Herzegovina – 2.0 – 1.99 – May/24
  • Bulgaria – 2.5 – 2.3 – Jun/24
  • Croatia – 2.4 – 3.3 – Jun/24
  • Cyprus – 2.92 – 2.72 – Jun/24
  • Czech Republic – 2 – 2.6 – Jun/24
  • Denmark – 1.8 – 2.2 – Jun/24
  • Estonia – 2.5 – 2.9 – Jun/24
  • Euro Area  – 2.5 – 2.6 – Jun/24
  • European Union – 2.7 -2.6 – May/24
  • Faroe Islands – 3 – 2.6 – Jun/24
  • Finlad – 1.3 – 1.5 – Jun/24
  • France – 2.2 – 2.3 – Jun/24
  • Germany – 2.2 – 2.4 – Jun/24
  • Greece – 2.3 – 2.4 – Jun/24
  • Hungary – 3.7 – 4- Jun/24
  • Iceland – 5.8 – 6.2 – Jun/24
  • Ireland – 2.2 – 2.6 – Jun/24
  • Italy – 0.8 – 0.8 – Jun/24
  • Kosovo – 2.4 – 2.4 – Jun/24
  • Latvia – 1.4 – 0.1 – Jun/24
  • Liechtenstein – 1.3. – 1.4. – Jun/24
  • Lithuania – 0.7 – 0.5 – Jun/24
  • Luxembourg – 2.21 – 2.59 – Jun/24
  • Macedonia – 3.2 – 4.5 – Jun/24
  • Malta – 2.2 – 2.3 – Jun/24
  • Moldova – 3.8 – 3.3 – Jun/24
  • Montenegro – 4.1 – 4.9 – Jun/24
  • Netherlands – 3.2 – 2.7 – Jun/24
  • Norway – 2.6 – 3 – Jun/24
  • Poland – 2.6 – 2.5 – Jun/24
  • Portugal – 2.8 – 3.07 – Jun/24
  • Romania – 4.94 – 5.1 – Jun/24
  • Russia – 8.6 – 8.3 – Jun/24
  • Serbia – 3.8 – 4.5 – Jun/24
  • Slovakia – 2.1 – 2.2 – Jun/24
  • Slovenia – 1.5 – 2.5 – Jun/24
  • Spain – 3.4 – 3.6 – Jun/24
  • Sweden – 2.6 – 3.7 – Jun/24
  • Switzerland – 1.3 – 1.4 – Jun/24
  • Turkey – 71.6 – 75.45 – Jun/24
  • Ukraine – 4.8 – 3.3 – Jun/24
  • United Kingdom – 2 – 2 – Jun/24

Source: tradingeconomics.com

Government Policies and Regulations

Government policies and regulations are pivotal in shaping the real estate market. Tax incentives, property ownership regulations, and zoning laws can significantly impact investment decisions. In Montenegro, for instance, the government offers favourable tax policies to attract foreign investors. As you can learn in our guide to Montenegro taxes, the country provides competitive tax rates and streamlined processes for property transactions.

Countries like France and Belgium have high property taxes, which can deter investment. However, these countries also offer various energy-efficient and sustainable housing incentives, attracting environmentally conscious buyers. The Netherlands has implemented policies encouraging affordable housing construction, helping to balance market demand and supply.

In Spain, recent regulatory changes aimed at increasing tenant protection have impacted the rental market, making it less attractive for landlords but providing more security for renters. Germany has stringent rental control policies, particularly in Berlin, where measures have been introduced to cap rent increases and protect tenants from exorbitant rent hikes.

Country-Specific Examples:

Portugal: Portugal offers attractive tax incentives through its Non-Habitual Resident (NHR) scheme, which has attracted many foreign investors and retirees. The Golden Visa program also provides residency to non-EU citizens who invest in real estate.

Greece: Greece’s Golden Visa program has similarly attracted international investors, offering residency permits in exchange for property investments. Additionally, reduced property taxes and incentives for renovation have spurred interest in the Greek real estate market.

Austria: Austria has relatively high property taxes, particularly in Vienna. However, the country offers various subsidies for energy-efficient renovations and sustainable building projects, making it a leader in green real estate initiatives.

Sweden: Sweden has strict regulations on property ownership and rental markets, which have kept property prices stable but high. The country’s emphasis on sustainable urban development has also influenced its real estate policies.

Investment Opportunities in the European Real Estate Market

Europe offers a plethora of investment opportunities across its diverse real estate markets. In 2024, several regions and property types are expected to stand out.

Best Real Estate Market in Europe

Identifying the best real estate market in Europe involves considering factors such as economic growth, demand for luxury properties, and investment returns. Germany, France, and the UK consistently rank high due to their stable economies and robust property markets.

Undervalued Real Estate Markets in Europe

Investing in undervalued real estate markets can yield substantial returns. Eastern European countries, including Montenegro, offer excellent opportunities for investors seeking high growth potential at relatively low entry costs. With its luxury developments, cities like Tivat are prime examples of undervalued markets with significant upside potential. Coastal investment properties offering magical views of the Adriatic Sea are especially popular.

European Commercial Real Estate Market

Europe’s commercial real estate market is evolving, with a growing emphasis on sustainability and innovation. Office spaces, retail properties, and logistics centres are vital segments. According to Technavio, the European commercial real estate market is expected to grow significantly, driven by urbanisation and technological advancements.

Types of Real Estate Investments

Investors have various options for real estate investments, each with unique advantages and risks.

Direct Property Investment

Direct property investment involves purchasing physical properties like residential homes, commercial buildings, or industrial facilities. This type of investment offers control over the asset and the potential for high returns through rental income and capital appreciation.

Real Estate Investment Trusts (REITs)

REITs allow investors to buy shares in a portfolio of real estate assets, providing exposure to the market without the need for direct property ownership. REITs offer liquidity, diversification, and regular income through dividends. They are a popular choice for investors seeking passive real estate exposure.

Crowdfunding

Real estate crowdfunding platforms enable investors to pool funds for specific properties or developments. This investment model offers lower entry barriers and diversification, making it accessible to a broader range of investors. Crowdfunding is particularly popular for funding commercial and residential projects.

Can Foreigners Buy Property in Europe?

Foreign investment in European real estate is a significant driver of market growth. However, regulations regarding foreign property ownership vary across countries.

General Regulations

In most European countries, foreigners can buy property without significant restrictions. Countries like Germany, France, and the UK have transparent legal frameworks facilitating foreign property ownership. However, some countries may have specific requirements or limitations.

Montenegro's Attractive Policies

Montenegro stands out for its investor-friendly policies. The country allows foreign investors to purchase property without restrictions, making it an attractive destination for international buyers. Foreigners can easily buy property in Montenegro, benefiting from streamlined processes and favourable tax rates. 

Our guide provides all the answers to how to invest in Montenegro and what types of investments you are entitled to.  And if you are debating whether to choose this country for your investment, here is a list of interesting facts about Montenegro that may convince you to decide

Factors Driving Demand in the European Real Estate Market

Several factors are driving demand in the European real estate market, particularly in the luxury segment.

Demographic Trends

Demographic trends play a crucial role in shaping real estate demand across Europe. The continent is experiencing significant changes in its population structure, which directly impact housing needs and preferences.

Ageing Population:

Europe has one of the oldest populations globally. According to Eurostat, the median age in the EU-27 was 44.1 years in 2021, with countries like Germany, Italy, and Greece having some of the highest median ages, at 45.9, 47.3, and 45.6 years respectively.

This ageing population has led to an increased demand for retirement homes, assisted living facilities, and properties with healthcare amenities. The luxury real estate market is adapting by offering high-end retirement communities with top-notch facilities.

Wealth Distribution:

Older populations in Western Europe generally have higher disposable incomes and significant accumulated wealth, driving demand for luxury properties. According to the European Central Bank, the net wealth per household in the euro area averaged around €229,200 in 2020, with notable disparities across regions.

Wealthy retirees are increasingly seeking properties in Mediterranean countries like Spain, Italy, and Montenegro, attracted by the favourable climate and high quality of life.

Urbanisation and Migration:

Urbanisation continues to drive demand for residential properties in major European cities. According to the United Nations, 75% of the European population lived in urban areas in 2020, and this is projected to increase to 84% by 2050.

Major cities such as London, Paris, and Berlin attract significant internal and international migration due to their economic opportunities and vibrant lifestyles. This influx of people boosts demand for both luxury and affordable housing.

In contrast, rural areas and smaller towns are seeing depopulation, leading to lower demand and potentially undervalued real estate markets. Countries like Hungary and Poland are experiencing such trends, creating opportunities for investors seeking long-term growth.

Migration Patterns:

Europe has seen significant immigration from non-EU countries, driven by economic opportunities, political stability, and quality of life. Countries like Germany and Sweden have been major destinations for immigrants, contributing to housing demand.

Conversely, countries facing economic challenges, such as Greece and Italy, have seen higher emigration rates, which can negatively impact local real estate markets. However, the return of expatriates and investment by the diaspora can also stimulate demand in these markets.

The freedom of movement within the EU also facilitates relocation among member states, influencing property demand in regions with favourable economic and social conditions.

Quality of Life

Quality of life is a significant factor influencing real estate demand. Countries with high living standards, excellent healthcare, and robust infrastructure attract both domestic and international buyers. According to the European Commission, countries like Germany, France, and the UK consistently rank high in terms of quality of life.

The availability of top-tier healthcare facilities is a crucial factor for buyers, especially retirees. Countries like Switzerland and the Netherlands are known for their excellent healthcare systems, attracting high-net-worth individuals.

Challenges Facing the European Real Estate Market

The European real estate market has long been a stable investment option characterised by steady growth and reliable returns. However, recent economic challenges, including inflation, rising interest rates, and geopolitical tensions, have raised concerns about the stability of this market. Let’s delve a little deeper into that.

Economic Challenges

  • Inflation: European countries have been grappling with high inflation rates, which erode purchasing power and affect consumer confidence. The Eurozone’s inflation rate reached 8.4% in 2022, the highest since the euro was introduced.
  • Interest Rates: The European Central Bank (ECB) has raised interest rates to combat inflation. Higher interest rates increase borrowing costs, making mortgages more expensive and reducing demand for real estate. As of mid-2023, the ECB’s key interest rate was 3.75%, up from 0% at the beginning of 2022.

Geopolitical Tensions: The ongoing conflict between Russia and Ukraine has created economic uncertainty, particularly in Eastern Europe. This instability has affected investor confidence and slowed down economic growth in the region.

Market Indicators

Despite these challenges, the overall European real estate market is not in a full-blown crisis, but specific trends indicate potential trouble:

  • Price Adjustments: While some markets remain robust, others are experiencing price corrections. According to a report by Knight Frank, residential property prices in the Eurozone grew by only 2.1% in 2023, down from 6.2% in 2022.
  • Decreased Transactions: Transaction volumes have declined across Europe. In Q2 2023, property transactions were down by 15% compared to the same period in 2022, according to the same report.

Rising Inventory: An increase in unsold properties suggests a cooling market. In cities like London, Berlin, and Paris, inventory levels are at their highest since 2019.

What are the Real Estate Market in Europe Predictions?

The European real estate market has always been a focal point for investors, homebuyers, and industry professionals. With its rich history, diverse cultures, and varying economic conditions, Europe’s property market presents both opportunities and challenges. As we look ahead, understanding the market predictions for the next 5-10 years can help stakeholders make informed decisions. This article delves into expert opinions, market forecasts, and potential game-changers that could shape the future of real estate in Europe.

Market Predictions for the Next 5-10 Years

The next 5-10 years are poised to bring notable changes to the European real estate landscape. One of the key trends identified by Savills, a leading real estate advisory firm, is the increasing demand for sustainable and energy-efficient buildings. With the European Union’s stringent regulations on carbon emissions, developers are focusing on green buildings that comply with these standards. This shift towards sustainability is expected to drive both residential and commercial real estate markets.

Furthermore, the impact of remote work must be addressed. The pandemic has accelerated the adoption of flexible working arrangements, leading to reevaluating office space requirements. As Mordor Intelligences stated, the global co-working space market has been on a constant rise for the past few years and is expected to grow at a CAGR of more than 4.5% by 2029. This trend is expected to reshape the commercial real estate market, with a focus on adaptable and technology-enabled workspaces.

Potential Game-Changers

New Technologies in Construction

The construction industry is undergoing a technological revolution that promises to significantly impact the real estate market. One of the most promising advancements is Building Information Modeling (BIM). BIM enables the creation of detailed 3D models that offer comprehensive insights into the entire construction process, from design to maintenance. This technology enhances efficiency, reduces costs, and minimises errors.

Another game-changer is integrating artificial intelligence (AI) and machine learning in property management. AI-powered systems can analyse vast amounts of data to predict maintenance issues, optimise energy consumption, and enhance security measures. Companies like Prologis and British Land are already leveraging AI to streamline their operations and provide better services to tenants.

Smart Cities and IoT

The concept of smart cities is gaining traction across Europe, and it has the potential to revolutionise urban living. Smart cities utilise the Internet of Things (IoT) to connect various systems and services, improving efficiency and quality of life for residents. For instance, smart grids can optimise energy usage, while intelligent transportation systems can reduce traffic congestion and improve public transport efficiency.

In cities like Copenhagen and Barcelona, smart city initiatives are already being implemented, focusing on sustainability and connectivity. These developments are expected to drive demand for properties in smart city zones, offering enhanced living experiences and reduced environmental impact.

Sustainable Building Materials

The push for sustainability is leading to the development and adoption of new building materials with a lower environmental impact. Materials such as cross-laminated timber (CLT), recycled steel, and low-carbon concrete are becoming more popular in European construction projects. These materials reduce carbon emissions and offer advantages in terms of durability and energy efficiency.

EU regulations and incentives promote green building practices and support the use of sustainable materials. As developers and investors increasingly prioritise sustainability, the demand for eco-friendly properties is expected to rise, influencing both residential and commercial real estate markets.

Best Place to Live in the Mediterranean

The Mediterranean region offers a unique blend of stunning landscapes, rich history, and a pleasant climate, making it one of the most sought-after areas for luxury real estate. Here, we explore some of the best places to live in the Mediterranean, highlighting their unique attributes and real estate opportunities.

Montenegro

Montenegro has emerged as a prime destination for luxury real estate in the Mediterranean. With its stunning Adriatic coastline, picturesque mountains, and historic towns, Montenegro offers an idyllic lifestyle. 

For those with sophisticated taste, the luxury real estate offer in Porto, Montenegro, will not disappoint. Located in the city of Tivat, it is one of the most beautiful places in Montenegro. Synchro Yards complex has especially drawn the attention of the elite, offering a variety of luxurious apartments designed to meet the needs of those appreciating a high-end lifestyle. 

Whether you are planning on buying a house in Montenegro or a spacious apartment with a panoramic view of the Adriatic Sea, this country is proven to be one of the best locations to invest in Europe due to its favourable tax laws, relatively low cost of living, beautiful nature and lovely people.

Spain

Spain is a perennial favourite for luxury real estate in the Mediterranean, thanks to its diverse landscapes, vibrant culture, and excellent climate. The Costa del Sol, with cities like Marbella and Malaga, is renowned for its luxurious beachfront properties and high-end amenities. 

The Balearic Islands, including Mallorca and Ibiza, offer exclusive villas and stunning views, attracting celebrities and affluent individuals worldwide. Spain’s Golden Visa program also makes it an appealing destination for non-EU investors.

Italy

Italy’s Mediterranean coast is home to some of the most luxurious real estate in the world. The Amalfi Coast, with its cliffside villas and breathtaking views, is a prime location for luxury homes. 

With its rolling hills and historic estates, Tuscany offers a unique blend of countryside charm and high-end living. Sardinia’s Costa Smeralda is another hotspot known for its exclusive resorts and crystal-clear waters. Italy’s rich cultural heritage, world-class cuisine, and high quality of life continue to draw international buyers.

Greece

Greece combines historical charm with stunning natural beauty, making it a top choice for luxury real estate. The islands of Mykonos and Santorini are particularly famous for their luxurious villas and scenic vistas. 

The Athenian Riviera offers upscale living in close proximity to the capital’s cultural and economic activities. Greece’s Golden Visa program is also a significant draw for foreign investors, providing residency to those who invest in real estate.

Croatia

Croatia’s Adriatic coast is a rising star in the Mediterranean luxury real estate market. With its well-preserved medieval architecture and stunning coastline, the city of Dubrovnik is a UNESCO World Heritage site and a popular location for high-end properties. 

The Dalmatian islands, such as Hvar and Korčula, offer beautiful landscapes and exclusive living. Croatia’s favourable property laws for foreigners and relatively lower prices compared to Western Europe make it an attractive investment destination.

Turkey

Turkey’s Mediterranean coast, particularly the region around Antalya, is known for its luxurious resorts and high-end real estate. The Bodrum Peninsula offers stunning villas and a vibrant nightlife, attracting wealthy buyers from Europe and the Middle East. 

Istanbul, straddling Europe and Asia, also offers a unique blend of historical charm and modern luxury. Turkey’s citizenship by investment program has further boosted its appeal as a real estate destination.

The diversity of the European luxury real estate market offers something for everyone’s taste. Whether you are looking for a lavish villa in Tuscany, a luxurious apartment in Montenegro or an urban flat in London, Europe won’t disappoint. With this European real estate market outlook 2024 is your year for an educated investment!

References

Statista – European Real Estate Market Overview 

Statista – Czech Republic Real Estate Market

Statista – Average square meter price of apartments and houses in France in November 2023

Statista – Harmonized index of consumer prices (HICP) inflation rate in Europe in March 2024, by country

Statista – Inflation rate in the European Union and the Euro area from 2019 to 2029

Statista – House price index in Germany from 2000 to 2023

NextMSC – Europe Real Estate Market Report

NextMSC – The France Real Estate Market

Mordor Intelligence – Residential Real Estate Market in Europe

Mordor Intelligence – UK Residential Real Estate Market Size & Share Analysis 

Mordor Intelligence – Europe Coworking Spaces Market Size & Share Analysis – Growth Trends & Forecasts (2024 – 2029) 

Technavio – European Commercial Real Estate Market Analysis. 

German Federal Statistical Office – Prices of residential property

Knight Frank – Wealth Report 2023

UBS – Global Real Estate Bubble Index 2023

Savills – Monaco Real Estate Market Overview

Savills – Prime Residential Index: World Cities

Savills – Real estate sustainability priorities in 2024

Properstar – Bulgaria Housing Price

Numbeo – Cost of Living in Budapest

Numbeo – Property Prices in Budapest, Hungary

Technavio – Europe – Commercial Real Estate Market by Type and End-user – Forecast and Analysis 2024-2028

European Commission – Quality of life indicators – overall experience of life

European Central Bank – Key ECB interest rates

Statistics Sweden – Real estate price index

Statistics Finland – Real estate prices