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18 March 2020, Europe | News

Catella European residential market map 2020

The world around us is currently changing dramatically, but continuity should also determine our future actions. One component of our claim to information on the markets for you is to continue with what is tried and tested. Once again, Catella Research has analysed the commercial residential real estate market of 59 cities in 19 European countries. 

The result is, on the whole, quite comparable with that of the European commercial real estate markets: rents and purchase prices for apartments have mainly risen, the total transaction volume has grown continuously and yields remained stable or decreased further at the end of February as of the reporting period.

Here are further important results of our analysis:

  • The average monthly apartment rent (all years of construction) of our 59 analysed cities currently stands at €15.32/sqm, an increase of 1.3% compared to our last years’ analysis in H1 2019.
  • The lowest residential rents are found in Liège (€9.00/sqm), followed by the city of Brno in the Czech Republic with an average of €9.25/sqm.
  • Paris, Geneva and Dublin still remain the most expensive rental markets, all exceeding the €26.00/sqm mark.
  • The average purchase price for an apartment in Europe (all years of construction) currently amounts to €4,617/sqm, a slight increase of approx. 1% compared to the previous years. Prices range from €1,600/sqm in Riga to €16,024/sqm in London.
  • London still ranks first as the prime market for apartments for sale but the average purchase price decreased by 2.4% compared to the previous year. In second place follows Geneva with an average purchase price for apartments of €12,670/sqm (+6.3%)
  • The average European prime net yield for multifamily houses is currently at 3.69%. Compared to our last analysis in Q1 2019 average prime yield decreased by only -3 basis points. This is mainly due to stagnating yields in major European countries and markets like Finland, France, Spain, United Kingdom and Germany.
  • The lowest yield of all European residential markets can be found in Stockholm with 1.50%, followed by Zurich with 1.60%.
  • The most attractive prime yields of the 59 analysed markets can be mainly found in the Eastern European cities like Riga (5.50%), Tallinn (5.50%) and Wroclaw (5.40%).
  • By the end of the year we mainly predict stagnating but even further slightly decreasing yields in some markets among Belgium, Netherlands, Germany, France and the Baltic States.
  • The total residential transaction volume (incl. student housing) of our analysed 19 countries totalled to €59.1 billion in 2019. Compared to the result of the previous year the volume increased by approx. 4%.
  • Nearly one third of total transaction volume amounts to Germany (€18.0 billion). The UK ranks on second place with €9.5 billion. The taillights in the transaction ranking are mainly the Eastern countries with a traditionally high ownership rate e.g. Lithuania, Latvia, Czech Republic and Estonia.
  • In all countries the capital city generates the highest GDP and even stands for the most expensive cities regarding cost of living. But nevertheless, average rents and apartment prices in markets beyond the capital city increased even slightly stronger.

 Or conclusion:

European residential properties are highly attractive for investors who are seeking for good diversification opportunities and targeting a balanced yield / risk portfolio among European markets. Major metropolitan areas or the capital city of each country are mainly the most sought after markets with positive socioeconomic development and strong price growths. However, on the other hand these markets are significantly more volatile and heterogeneous compared to 2ND- tier markets, especially in times of considerably changed economic conditions.


Download European residential market map 2020