EMEA Living Market Dynamics Q2 2026

Investment in multi-housing and PBSA reached €17.4bn in the second quarter of the year. It was the highest quarterly transactional volume since 2022, rising 49% year-on-year, due to strong growth in multifamily portfolios. This brought the half-year total to €31.2bn, reflecting a 10% increase on the prior year, exceeding the 2021-25 five-year H1 average by 16%.

The average deal size grew to €72m compared to €39m in the prior-year period, evidence that larger deals have boosted volumes, amid a 19% fall in the number of transactions. Some 68% of volumes fell were in transactions over €100m, with these combined volumes rising by 103% compared to an 8% fall in volumes of deals under €100m.

Multifamily investment grew by 83% year-on-year due to various €1bn+ platform deals in Sweden, the UK and Spain. Affordable housing had the second-highest gains due to growth in Spain. Affordability challenges are shaping market dynamics across the region, as average growth in city residential sales prices slowed to 3.1% in Q2 below average rental growth of 3.4%, both just over average inflation in these markets of 2.6%. Renting is now more affordable than buying in two thirds of key European cities due to high prices and mortgage costs.

Construction cost growth is also outpacing inflation, up 3.7% in Q2, due to global supply chain pressures as a result of the Middle East conflict and disruption to shipping. New supply will be limited by rising costs, despite recent growth in permits up 7.7% in Q1. Strong tenant demand and a clear supply imbalance will continue to underpin investor sentiment and strong performance.