Real estate network Remax has published its European real estate report for this year. The report, which compiles data from Remax Europe and its 40 regions, shows that the buyer’s market continues to intensify, as well as the fact that the energy efficiency of properties, along with location, is becoming a major factor in property valuations.
The following conclusions and trends focused on housing can be drawn from the report:
● Price trends: Prices in the main European cities (Spain, Germany, Portugal, France and Italy) recorded a decrease of 0.9% in the last quarter of 2023, indicating a shift towards price stabilization.
● Rental market: EU rental prices rose by 0.7%, driven by a lack of supply and difficult access to credit for property purchases, pushing buyers to rent.
● Foreign investment: International buyers continue to significantly influence demand and prices.
● Construction sector: Rising interest rates and high material costs are impacting the industry significantly. This, together with market volatility, discourages investors and hinders the completion of projects in Central Europe. Updated EU Energy Performance of Buildings Directive (EPBD)) increases complexity and exacerbates difficulties.
● Energy efficiency: As the EU sets minimum standards through the EPBD Directive, energy efficiency is becoming a critical factor in property appraisals and mortgage approvals.
● Consulting services: Real estate professionals advise buyers and sellers on market conditions and connect with experts to evaluate the cost of upgrades and renovations to ensure lasting value for real estate investments.
In 2023, sellers and buyers continued to adjust to inflation and higher interest rates. Transactions are falling as sellers adjust to slower sales and buyers face longer financing processes. European real estate markets have shown different trends, each uniquely adapting to the changing financial environment:
● Minor price adjustments: Portugal, Germany and Italy showed smaller price fluctuations in the final months of the year, +0.1%, -0.2% and -0.2%, respectively, compared to the second quarter of 2023.
● Notable price trends: Spain, the Czech Republic and France saw price declines of -1.9%, -2% and -3.8% from the second quarter of 2023.
“We see the market continue to shift from historically low interest rates to a buyer-centric era, with downward pressure on demand and prices. The importance of energy efficiency remains here and is a driver of the attractiveness and quality of property value along with location. It is essential for new construction and is strictly assessed on existing properties. At REMAX Europe, our main commitment is to offer our customers an exceptional experience. Staying at the forefront of these market trends is essential in our mission to lead our clients and contribute to a vibrant European real estate market,” he says. Michael Polzler, CEO of REMAX Europe.