Investment Volume
The European residential investment volume reached €29.3bn over the 9 months of 2025, an increase of 7% compared to the same period last year. The decrease of large-scale deals, means smaller-scale deals continue to drive residential market activity keeping the sector’s share of volume at 20% of total real estate investment.
Residential Prices
Residential prices across European cities expanded on aggregate by +4.6% in Q2 2025 vs Q2 2024.
In most European cities, mortgage rates have fallen because of monetary easing: Euro area mortgage rate stands at 3.31% in Q3 2025, a decrease of 33 bps y/y. However, household housing purchasing power is expected to remain weak across cities. An improvement is not necessarily expected due to rising property prices. The pathway for HPP will depend on whether lower interest rates or higher prices dominate market activity.
Rents
Despite central bank rate cuts, housing purchasing power remains lower in most European cities than 3 years ago: reduced ability to buy persists. Consequently, rental demand is increasing, leading to rental growth at European level by +4.4% y/y in Q2 2025.
