The European real estate market is making a strong comeback in 2025, with investors turning their attention to residential and hotel properties. This resurgence is driven by stabilizing economies, lower interest rates, and evolving market conditions across Europe.
Residential Real Estate: Market Trends and Price Updates
After a period of correction, housing markets in key European countries are showing signs of recovery:
Germany: Price Recovery on the Horizon
- Home prices fell 12% from the 2022 peak, but are expected to rise by 3% in 2025 and 2026.
- Falling mortgage rates are fueling increased buyer activity.
- Average price per square meter: Varies by city, with Berlin and Munich leading the market.
France: Prices Stabilizing After Declines
- The real estate market is easing from past declines, with stabilization expected by early 2025.
- Paris: The average price per square meter is €9,520.
- Île-de-France: The average is €6,150 per square meter.
United Kingdom: Houses or Flats – A Growing Price Gap
- The price gap between houses and flats is the widest in 30 years.
- Houses: The average price is £319,500.
- Flats: The average price is £191,300.
- Market trend: Demand for spacious homes is rising, while flats face concerns over cladding and service charges.
Other European Hotspots
- The Netherlands, Brazil, Mexico, and Canada are expected to see strong home price growth in 2025.
- Government housing incentives and economic factors support price recovery in these regions.
Hotel Real Estate: Investment Boom in 2025
The European hotel market is witnessing a surge in investor interest, with several key trends shaping the sector:
Investment Growth
- Hotel investment transactions in Europe grew by 49% year-on-year in early 2024.
- Total investment volume is expected to reach €22 billion in 2024 and exceed €25 billion in 2025.
Limited Supply, Strong Demand
- Hotel supply growth in Europe’s top 15 cities will remain at 2.6% in 2025.
- The luxury hotel segment will experience a 4.3% growth.
Luxury Hotel Openings in 2025
- Chancery Rosewood, London
- Nobu, Lisbon
- Mandarin Oriental, Vienna
- These openings highlight the confidence of investors in the European hospitality sector.
Conclusion: Is Now the Time to Invest?
With stabilizing prices and high investor confidence, 2025 presents a golden opportunity for real estate investment in Europe. The residential market is recovering, and the hotel sector is experiencing a surge. However, investors should analyze regional trends and financing conditions to make strategic decisions.
Are you considering investing in European real estate? Share your thoughts in the comments below!
