General Market Sentiment and Behavior in EU

After a period of economic uncertainty (2022-2023), sentiment is improving with moderating inflation and interest rate cuts by central banks (ECB).
Investment activity is picking up, especially in H1 2025, suggesting increased buyer and seller confidence.
However, transaction volumes are still lower than pre-pandemic levels in some areas, indicating a more measured approach.

High interest rates in 2023-2024 stretched affordability, particularly for residential properties.
Buyers are more price-sensitive and seeking value, leading to increased interest in areas with higher rental yields and more accessible pricing.
Affordability issues are exacerbated by a persistent housing shortage (estimated 9.6 million homes needed in Europe).

Sustainable & Energy-Efficient Homes: Growing demand for properties with strong ESG (Environmental, Social, Governance) credentials due to rising energy costs, stricter climate regulations, and a desire for lower utility bills. Buyers are willing to pay a premium for green features.
Modern & Quality Stock: Preference for properties that offer modern amenities and meet contemporary living standards.
Rental Properties (Build to Rent – BTR): High demand for rental properties due to urbanization trends, tight mortgage conditions, and increasing age of first-time homebuyers. Institutional investors are actively targeting BTR projects.
Location:
Suburban Areas (post-WFH impact): Continued interest in suburban locations for more space and affordability, driven by the lingering effects of remote/hybrid work.
Prime Urban Centers (for quality): Despite suburban shifts, prime locations in major cities (e.g., central business districts) with high-quality, amenity-rich properties still command strong interest and rental growth.
Size: Larger homes, particularly further from city centers, have seen faster price increases post-pandemic, reflecting a desire for more living space.

Lower CO2 Emissions: Crucial for both environmental impact and potential future regulatory compliance.
High Energy Efficiency: Directly translates to lower operating costs (utilities) and a more comfortable living environment.
Access to Public Transportation: Reduces reliance on private cars, aligning with green living and urban convenience.
Health and Well-being: Features that promote indoor air quality, natural light, and access to green spaces are increasingly valued.
Technology Integration: Smart home features, digital management systems, and robust connectivity are becoming expectations.
Flexibility & Adaptability: Demand for spaces that can adapt to changing needs, whether in residential (e.g., home offices) or commercial settings.
Amenities: Access to shared amenities (e.g., gyms, co-working spaces, communal gardens) is a key differentiator, especially in rental and mixed-use developments.

Greater emphasis on home as a multi-functional space (work, leisure, living).
Increased awareness of environmental impact and long-term operating costs.
More discerning in choices, seeking “flight to quality” in both residential and commercial assets.
Tolerance for Higher Rents (Residential): Due to high house prices and mortgage rates, many are opting to rent for longer, pushing up rental demand and prices.
Hybrid Work Influence (Commercial): Companies (and their employees) are demanding more flexible, collaborative, and amenity-rich office spaces, leading to a “flight to quality” and consolidation of office footprints. Obsolete office buildings are being vacated.

First-Time Homebuyers: Average age has climbed (from 34 y.o.), reflecting affordability challenges and longer periods of renting.
Younger Generations (Millennials & Gen Z): More likely to be renters due to affordability, and prioritize sustainable living and access to urban amenities. They are a significant driver for the BTR market.
Aging Population: Growing demand for senior living facilities, especially purpose-built accommodation.

Squeezed Real Incomes: High inflation has stretched affordability for many households.
Demand for Affordable Housing: Despite rising incomes in some sectors, a significant portion of the population faces challenges in accessing affordable housing.
Foreign Buyers: Remain a significant segment in certain markets, such as Spain (14.48% of purchases in Q4 2024), with British, Germans, Dutch, and French being prominent.