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Evolution of the European Real Estate Market: Prospects for 2024:

According to the global research by Savills World Research, real estate investment worldwide is expected to increase in 2024, reaching its peak in the third quarter. Portugal stands out as one of the most sought-after destinations due to its tourism potential.

Savills researchers anticipate a more positive investment environment in 2024, with 57% of respondents expecting a moderate to strong increase in investment activity next year. This optimism rises to 70% for multi-family residential properties and 66% for industrial and logistics properties.

Savills predicts an increase in investment activity in the third quarter of 2024, driven by important markets, including the US and the UK. The consultancy highlights the multifamily sector, where demand outstrips supply, and the logistics sector, driven by its strong fundamentals.

Challenges in the European Real Estate Market and Portugal’s Position

The European real estate market is facing significant challenges due to rising interest rates, resulting in a slowdown in investment and asset prices. BNP Paribas RE predicts a recovery in 2024, especially when investors adopt strategies adapted to a more stable macroeconomic environment.

In the first half of 2023, European investment reached its lowest point in a decade, with a 57% reduction. The top five markets, including the UK, Germany, France, Spain, and Italy, experienced significant declines. Spain was the exception, recording an increase in investments.

Outlook for the Residential Market in 2024

In the first half of 2023, residential investment in Europe decreased by 62% compared to the same period in 2022. Savills highlights the need for price adjustments to resume transactions, especially due to refinancing, posing a risk for some investors.

Despite the decline in prices of used homes over the next five years, demand for rentals remains high, driven by decreased affordability due to rising mortgage rates and home prices. Southern European cities and Vienna demonstrate resilience, maintaining rising prices, while a trend reversal is expected by the end of the year.

In summary, although the European real estate market faces challenges, there is an expectation of gradual recovery in 2024, with Portugal standing out as one of the most attractive destinations for real estate investments due to its rising tourism potential.


Source: The Portugal News 

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