The European real estate market is entering a new phase of measured but resilient growth, creating a favourable backdrop for innovation and technology adoption. Recent analysis projects that the market, valued at USD 1.62 billion in 2024, will reach USD 2.41 billion by 2033, reflecting a compound annual growth rate (CAGR) of 4.50% between 2025 and 2033. This steady expansion, underpinned by structural trends rather than short-term speculation, provides a solid foundation for investors, developers, and PropTech companies planning for the next decade.
Several macro drivers are shaping this outlook. Rapid urbanisation in major hubs such as London, Paris, Berlin, Munich, and other metropolitan regions is sustaining demand for both residential and commercial property. At the same time, demographic shifts particularly ageing populations and the continued rise of mobile young professionals are reshaping housing preferences, from multi-generational living to high-amenity rental schemes. E‑commerce growth continues to support logistics and warehousing demand, while sustainability imperatives and the spread of smart building technologies are influencing how assets are designed, operated, and valued.
Within this broader landscape, Germany stands out as the region’s anchor market, accounting for 32.0% of European real estate activity in 2024. Robust economic performance, strong infrastructure, and deep capital markets have kept German cities at the forefront of both domestic and cross-border investment. However, the growth narrative is broader than any single country. Rising homeownership across the European Union now at roughly 69% of the population combined with relatively low interest rates and supportive government schemes has made ownership and long-term investment more accessible in multiple jurisdictions.
Segment performance across the market highlights where the most immediate opportunities lie. Residential property remains the largest category, comprising around 45.8% of market activity in 2024. This segment is being driven by urbanisation, stable macroeconomic conditions, income growth, and expanded housing policies, including incentives for first-time buyers and programmes aimed at improving affordability. Commercial real estate, meanwhile, continues to evolve in response to new workplace models, the expansion of technology hubs, and renewed demand for high-quality retail and mixed‑use environments. Industrial assets particularly logistics and distribution centres benefit from sustained e‑commerce growth, supply‑chain reconfiguration, and infrastructure upgrades, while land opportunities are emerging on the back of expanding built‑up areas and new transport links.
From a business-model standpoint, sales transactions still dominate, accounting for 56.8% of the market in 2024. This reflects both investor appetite and ongoing demand for second homes, lifestyle-led purchases, and long-term investment holdings. The rental segment, however, is also well supported, underpinned by preference shifts following the pandemic, the search for flexibility among younger cohorts, and affordability constraints in prime markets. For PropTech firms operating in leasing, tenant experience, and asset management, the dual strength of sales and rental activity provides multiple entry points for value creation.
Despite rapid digitisation across financial services and other industries, the European real estate market remains predominantly offline in its transaction modes. Traditional, face‑to‑face channels represented 64.5% of activity in 2024, driven by the complexity of transactions, the importance of local knowledge, legal requirements, and the preferences of older and high‑net‑worth buyers. Online platforms are growing but still account for a minority share, suggesting that hybrid models combining digital tools with advisory-led engagement are likely to define the next stage of market evolution. This dynamic is particularly relevant for PropTech companies focused on brokerage, transaction management, and digital marketplaces, where the opportunity lies in augmenting, rather than fully replacing, established intermediaries.
Capital flows continue to reinforce the sector’s appeal. Economic stability and low interest rates across the euro area have supported purchasing power and investment capacity, with GDP rising by 0.9% and unemployment averaging 6.5%. Foreign direct investment into commercial real estate has been substantial, totalling around EUR 320 billion (USD 362.82 billion), while individual country data highlights growing confidence: France recorded a 7% increase in FDI in 2022; the UK saw greenfield investments rise by 32% to USD 85 billion; and Italy registered a 71% increase in FDI, reaching USD 43 billion by early 2025. These inflows are being channelled into residential, commercial, and industrial projects, reinforcing the need for robust data, risk analytics, and technology‑enabled asset management.
Recent developments in the PropTech and investment landscape underline how innovation is being deployed to manage risk and unlock new yield. In March 2025, Norwegian startup Telescope raised EUR 3.7 million in seed funding for a SaaS platform that assesses climate and biodiversity risks, supporting more informed, sustainability aligned investment decisions. Manova Partners launched its Manova European Logistics Real Estate Fund II (MELREF II), targeting EUR 300–500 million with a focus on prime logistics assets and a 5% yield profile, reflecting sustained interest in resilient, income‑producing industrial strategies. Apollo Global Management has also seeded its first European real estate credit fund with USD 170 million, concentrating on senior loans to low‑risk properties, indicating continued demand for structured credit solutions.
Meanwhile, new platforms and vehicles continue to emerge. Lionel Messi’s real estate investment trust, Edificio Rostower Socimi, debuted on Spain’s Portfolio Stock Exchange with a market capitalisation of EUR 223 million, illustrating the visibility and diversification appeal of listed real estate structures. MC Property, founded in June 2024 by former executives from Cromwell Property Group and Valad Europe, is positioning itself as a pan‑European investment firm focused on industrial assets, a segment closely tied to logistics, e‑commerce, and infrastructure demand. For London PropTech Show stakeholders, these examples highlight how data, technology, and new capital structures are converging to reshape risk, return, and sustainability profiles across the continent.
For PropTech innovators and real estate leaders, the implications of this analysis are clear. A market on track to grow from USD 1.62 billion to USD 2.41 billion by 2033, with a steady 4.50% annual growth rate, is one where long‑term planning, operational excellence, and technology adoption matter more than ever. Residential and logistics remain core engines of demand; offline channels still dominate complex, high‑value transactions; and sustainability considerations, from climate risk to energy performance, are increasingly central to investment decisions.
As Europe’s built environment evolves, London PropTech Show 2026 will provide a platform for investors, developers, technology providers, and policymakers to explore how these trends translate into practical strategies and partnerships. From AI‑driven analytics and climate risk tools to digital transaction platforms and smart‑building solutions, PropTech is positioned to help the industry navigate this next phase of growth with greater transparency, resilience, and impact
