European Living Market Dynamics
Q2 2025

Private investment in living real estate reached €13.5 billion in the second quarter, a rise of 35% quarter-on-quarter and up 2% on the same period last year. This brought the first half to €23.5 billion, an increase of 7% year-on-year.

Transactions are becoming larger and more focused on standing assets, following yield stabilisation with compression in some markets and a rebound in core activity this year. In Q2, some 72% of investment went to existing assets, the highest level since Q2 2021 and a 42% rise on the same period last year.

In contrast, forward investment has been restricted by rising residential construction costs and lengthy development processes, leading to a 43% fall against last year. New residential starts have fallen dramatically across major European cities, further worsening the undersupply.

Various government initiatives seek to unlock new housing, including reviewing rent regulation and increasing subsidies to support private investment in new supply. Sentiment is strengthening, with fundraising in 2025 exceeding 2024 levels, capital values rebounding and as listed groups become more acquisitive. Large platform sales in progress and M&A are expected to drive further growth in investment in the second half of the year.