Europe Luxury Residential Real Estate Market - Growth, Trends, And Forecast (2023-2028)

The size of Europe Luxury Residential Real Estate Market is USD 124.6 billion in the current year and is anticipated to register a CAGR of over 4% during the forecast period. The COVID-19 pandemic significantly impacted the luxury housing market, which saw a drop in sales transactions. Due to pandemic restrictions and lockdown measures, sales in Europe were hampered.

Key Highlights

• The sector is in the recovery phase, and in a few European countries, like France, the market was resilient during the COVID-19 pandemic. The market in the French Riviera remained resilient even during the pandemic crisis, with high demand and stable price development in the luxury market. Despite the general uncertainty surrounding the economy, European residential markets, in most cases, showed at least minor growth in pricing. The real estate sector in France and Germany has seen tremendous growth in investment volumes.
• In 2021, the European real estate market made a robust comeback, with year-end figures approaching pre-pandemic levels. European commercial real estate investment had increased by 19% in 2021 to reach EUR 256 billion (USD 2.68 billion).
• It is important to note that real estate investment volumes vary significantly across European countries with few European countries dominating the international luxury residential market. France, Italy, Spain, and Portugal are at the top of the list, with Germany, the United Kingdom, Andorra, Greece, Cyprus, and smaller Eastern European markets like the Czech Republic, Croatia, and Montenegro following closely after.
• People's growing preference for luxury amenities and wealthy buyers looking for safe real estate investments are driving demand for luxury residences.

Europe Luxury Residential Real Estate Market Trends

Largest Real Estate Companies in Europe

As of April 2021, European companies were recognized as the top three real estate companies by market value in Europe. Segro placed first when these real estate companies were compared by market value as of April 2021, despite having the smallest asset value. Segro, a real estate company based in the United Kingdom, was valued at approximately USD 16.23 billion. Segro company owns commercial and industrial properties in the United Kingdom, France, the Czech Republic, Poland, Italy, the Netherlands, Belgium, Spain, and Germany. L E Lundbergfoeretagen AB of Sweden and Covivio of France were ranked second and third, respectively, with a market cap of USD 14.47 billion and USD 8.63 billion. In total assets, Covivio ranked first among European real estate businesses in 2020.

The European real estate market is a heavily contested investment opportunity with high-demand areas and prospects for significant investment returns. The desire for highly compensated employees to live centrally in favored areas, coupled with the scarcity of available space and high land and construction expenses, contribute to the continued growth of the European luxury residential real estate market.

Average Cost of an Apartment in Europe by City

Despite the problems caused by the pandemic, the European market has made great progress. Three factors drive the luxury real estate market in Europe. People are upgrading their existing residences, a new interest in second homes is currently driving the luxury residential market in the country, and a change of lifestyle, as some people are settling in the outskirts of the city and enjoying a better quality of life by utilizing modern technologies.

With average values of nearly EUR 15,430 (USD 16,439) per square meter, London, England's capital, was the most expensive European city to buy an apartment. This was over ten times the average price per square meter of an apartment in Riga, Latvia's capital city.

The need for high-paid professionals to be located in prime locations, with a scarcity of available space, expensive land, and construction costs, all contribute to rising rental prices. Similar to any other consumer-driven business, exorbitant rents are a major cause in many European towns. Prices will rise if supply lags behind demand. A combination of factors, including a lack of available space, expensive land and construction expenses, and the desire of highly compensated workers to live centrally in favored areas, all contribute to the continued rise in rental rates.

Europe Luxury Residential Real Estate Market Competitor Analysis

The European luxury residential real estate market is fragmented and highly competitive. Europe's luxury residential real estate market is competitive with the presence of local and international players. Competition and pricing have increased as new investors and developers have entered the market, leading to an increase in the demand and supply of real estate.

Some of the top players in this market are Mansion Global, Proprietes Le Figaro, Sotheby's International Realty Affiliates LLC, John Taylor, Luxury places SA, Haussmann Real Estate, Rodgaard Ejendomme, Juvel Ejendomme, Barnes International Realty, and Belles Demeures, among others.

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• The market estimate (ME) sheet in Excel format
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