In its latest report, released in Portugal by Worx, it stresses that this growth will be strongly driven by demand, and will occur in less traditional markets. 

The two largest European markets, namely Paris and London, show behaviors opposite to this global trend. In Paris, and after two years of growth, the market is expected to decrease over the next 3 years.  And in central London, the slowdown induced by Brexit is expected to continue.  These should continue to be the cities with the most expensive rents.

But on the other hand, the “strong economic fundamentals” lead the German markets to reach a new historical peak of activity.  Despite a fall in the vacancy rate, German cities do not have the highest incomes, but will see one of the fastest rent increases in 2018.  Other cities such as Milan, Rome, Amsterdam or Brussels have reflected demand in this context of economic improvement.

BNP Paribas Real Estate expects a stable level of investment to ensure that total returns do not become negative for most cities.  Total return across Europe is expected to be 5.8% per year, of which 1.8% and 4% are related to capital growth and return on income, respectively.




Photo: Telmo Miller

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