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The change is already beginning to be felt in the major European real estate markets. According to a report by the consulting firm Colliers, countries such as Germany, France, Italy, Spain and the United Kingdom are already noticing the impact on the value of assets of both rising interest rates and slowing economic growth. Analysts warn that after a summer with excellent investment indicators, the main real estate markets are preparing for a difficult time.
The uncertainty caused by the macroeconomic and geopolitical situation in Europe is beginning to affect the real estate markets, although the data for the third quarter still reflect a high appetite of investors, and investment activity continues to be high, especially with regard to first-class assets in large cities.
The UK is one of the first markets to start slowing down after real estate investment volumes halved between the second and third quarters of the year amid strong economic and political turmoil. Rising asset prices are slowing the pace of trading as investors ponder the consequences of rising interest rates, political turmoil and inconsistent economic growth.
As for Germany, the driver of the European economy, the report emphasizes that the volume was high in summer. However, analysts point to a downward trend change as the gap in expectations between sellers and buyers increases.
France recorded a high volume of real estate investment in the third quarter, as well as record operations in the Paris office real estate market and growth in the logistics market. However, the country also faces a lot of uncertainty in the markets.
The document also specifically mentions Spain, whose housing market will come under the brunt. High inflation, rising energy prices and increased financial costs will hit household savings and consumption, which will cause a snow ball effect, especially affecting the housing market.
Source: Idealista
Photo by Ambitious Creative Co. - Rick Barrett on Unsplash
