Portugal stands out as one of the best destinations for real estate investment!

Evolution of the European real estate market: forecast for 2024

A global study conducted by Savills World Research predicts an increase in real estate investment worldwide in 2024, peaking in the third quarter. Portugal stands out as one of the most sought-after destinations due to its tourism potential. Savills researchers predict a more favorable investment environment in 2024, with 57% of respondents expecting a moderate to strong increase in investment activity next year. This optimism rises to 70% for multifamily residential developments and 66% for industrial and logistics properties. Savills predicts an increase in investment activity in the third quarter of 2024, pushed by major markets including the US and the UK. The advisory firm highlights the multifamily real estate sector, where demand exceeds supply, and the logistics sector, driven by its strong fundamentals.

Challenges in the European real estate market and Portugal's position

The European real estate market is facing serious challenges due to rising interest rates, resulting in slower investment and lower asset prices.

In the first half of 2023, investment in Europe reached its lowest point in a decade, down 57%. The five largest markets, including the UK, Germany, France, Spain and Italy, recorded significant declines. Spain was the exception, registering an increase in investment.

Forecast for the residential real estate market in 2024

In the first half of 2023, residential real estate investment in Europe decreased by 62% compared to the same period in 2022. Savills emphasizes the need for price adjustments to revive transactions, especially due to refinancing, which poses a risk to some investors.

Despite the decline in second-hand house prices over the next five years, rental demand remains strong, driven by reduced affordability due to rising mortgage rates and house prices. Southern European cities and Vienna are showing resilience, maintaining upward price trends, while a change in trend is expected by the end of the year.

In summary, despite the challenges facing the European real estate market, a gradual recovery is expected in 2024, with Portugal standing out as one of the most attractive real estate investment destinations due to its growing tourism potential.