Real estate market: the most effective sectors in 2024

The New Year has just begun, and real estate market experts are starting to make predictions about how the real estate sector will develop in the coming months, based on events from 2023. Macroeconomic changes, particularly in interest rates, led to a decrease in transactions last year, but the signals for 2024 are moderately positive for various real estate sectors, albeit with caution. Here’s what experts are predicting for the real estate market in 2024 and which sectors to pay attention to.

Residential real estate market

According to the research institution Tecnocasa, the residential real estate market closed 2023 with a decrease in transactions compared to the previous year. It is reported that there were approximately 680,000 transactions, which could drop to 650,000 by 2024, while prices may rise by up to 2 percent. These figures indicate a healthy market: "Interest rates remain high, and an improvement is expected by 2024, along with the caution of banks - these are factors that continue to make access to credit difficult, especially for those in need of large loans," says Fabiana Megliola, head of the research department at the Tecnocasa group.

“This could lead to a decrease in prices, especially for the most popular types of housing and larger spaces. Small apartments that do not require significant investments should not experience substantial declines.

The real estate investment sector in 2024

According to Savills Investment Management (Savills IM), various sectors may offer lucrative investment opportunities in 2024 that remain stable in terms of capital protection as well as providing steady and consistent income. A key factor is the transition to net-zero emissions and ESG.

• Rental residential real estate: historically, although it is a business for individuals in the local market, it will demonstrate favorable dynamics that make the sector's potential attractive to all institutional investors. The need to create a modern product that meets user needs significantly contributes to maintaining a substantial volume of new investments in the sector.
• Logistics: the dynamics of rental prices in major logistics centers will continue into 2024. Vacancy rates are almost zero, and the existing real estate stock is generally quite old...
• Real estate with debt obligations: another sector worth paying attention to is the area of real estate-related bonds.

Offices to pay attention to in 2024

According to JLL's analysis, the office rental market in 2023 reached approximately 680,000 square meters of leases, with 426,000 square meters in Milan and 250,000 square meters in Rome. For 2024, the focus remains on the quality of offices and their compliance with ESG parameters, especially considering the approaching 2030 deadline for achieving sustainability goals.

Luxury real estate: what to expect in 2024

The luxury real estate market will remain active in 2024. According to AdE data, the premium residential real estate market in Milan closed 2023 with a 6.2% decline in...