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Investing in European Real Estate: Report 2018

9 April 2018

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2018 is shaping up to be another buoyant year for the European real estate market. There’re notable areas of growth to highlight, including a rise in Asian investments in Europe; and the resurgence of opportunities to invest in real estate within both the Iberian region and the Nordics.

A change in the Capital Gains Tax regime announced by Chancellor Philip Hammond will level the playing field for UK and non-UK based investors in both residential and commercial real estate. The UK continues to be seen as a refuge by real estate investors, despite Brexit related market jitters, yet many investors are concerned about the impact that the new tax will have on margins when it’s introduced in April 2019.

The German market also remains strong overall and the uncertainty created by a potential change in political leadership is now resolved. Although a possible change in German Real Estate Transfer Tax (RETT) rules is mooted, only a small proportion of investors believe this will dampen down significant investment opportunities in Germany.

Artificial intelligence (AI) is likely to see an increase in interest in the European real estate market in 2018 and beyond. Investors believe that AI will be widely deployed across the industry in the short to medium term and that huge cost savings plus a reduction in time consuming manual tasks will ensue as a result. However, many real estate professionals remain wedded to traditional working methods, believing that AI still needs to be fully tried and tested.

Growth in key markets across Europe, underpinned by the accelerated change to operational processes enabled by AI, will ensure that the robust conditions enjoyed by the real estate industry in the first quarter of 2018 will continue for the rest of the year.

Uncertainty created by known changes to regulations not yet fully implemented, along with political change, means that we should always be prepared for the unexpected, but many of the bumps in the road highlighted in last year’s report are now safely navigated.

To read the full report, click here.