The European real estate market is poised for a major recovery in 2024, with the United Kingdom emerging as a beacon of opportunity for international investors. An anticipated fall in interest rates and a modest economic revival is paving the way for investors and instilling in them a sense of assurance after a tough period witnessed by the property markets.
According to a recent research conducted by international property firm Savills, “U.S., Israeli, Japanese and Taiwanese investors are set to lead that charge, spearheading a 20% rebound in real estate investment activity in 2024 as they pump cash into Britain, Germany, Spain and the Netherlands.”
In a report published by CNBC, Rashid Hassan, Head of Global Investment Cross-border Finance at Savills, was quoted saying that, “Certainly, it looks like we’ve gone beyond the worst and we’re having a little bit of creep on the recovery.” He also added, “The U.K. is one of the most heavily discounted markets,” he added. Noting that it moved “hard and fast” but that its fundamentals — namely a deep market, easy accessibility and limited domestic competition — remain in tact.
Another research by CBRE’s 2024 European Investor Intentions Survey, reports that, Britain ranked as the top European destination to invest, closely followed by Paris, Madrid, Amsterdam and Berlin. Factors such as discounts and the potential for high returns have made the UK, especially London, a top choice for international investors.
Chris Brett, Managing Director of CBRE’s European capital markets division said that, “London is one of those few cities which consistently demonstrates its resilience in the face of challenging economic headwinds and remains a major focal point for global capital.”
A UK based real estate agency “Knight Frank” estimates, that the U.K. is now expected to draw one-third, or over $13 billion of all outbound investment from the U.S. alone in 2024. Germany, Spain and the Netherlands are also poised to make significant gains, attracting significant capital from the US. This is a sharp change from last year, in which rising investment rates increased borrowing costs and weighed on investor sentiment.
According to Real Capital Analytics data given by Savills, “global cross border investment in real estate amounted to €196.3bn ($212.9 billion), 40% down on the five-year average, with declining inflows across all continents. However, EMEA was hardest hit, recording a 59% decrease on the five-year average (-56% from the American continent and -12% from Asia-Pacific).”
In 2023, the European continent received a total investment of 65.2 billion euros ($70.6 billion), most of which came from cross-border European buyers, mainly from France and Spain with less than half (40%) from outside the continent — the lowest share since 2010. However, the resurgence is expected as the European Central Bank and the Bank of England have cut rates, indicating a positive outlook for the regional property market.
The European real estate market is on the verge of recovery, with the UK at the forefront of this resurgence. Favorable market conditions coupled with renewed investor confidence have set the stage for a dynamic year in property investment.
