Emerging Trends in Real Estate: Europe 2026

"Emerging Trends in Real Estate: Europe 2026" is a comprehensive report published by PwC and the Urban Land Institute (ULI). The report is authored by a team of experts from PwC, including leaders in global real estate, research, and advisory services, alongside ULI staff members. It reflects insights gathered from over 1,276 senior professionals in the real estate sector, shedding light on the evolving landscape and challenges facing the industry.

The sentiment in European real estate is transitioning from cautious optimism to a more pragmatic outlook due to geopolitical and economic uncertainties. The professionals surveyed are navigating a prolonged transitional period marked by rising interest rates and the reversal of globalization trends. The conflicts in Ukraine and the Middle East further complicate the investment landscape.

The report identifies pressing concerns impacting the real estate sector, including political instability, construction costs, housing affordability, and increased regulation. A staggering 90% of respondents expressed concern over international political instability, while 77% cited housing affordability as a significant issue.

Economic growth in Europe remains a top concern for the industry, with 77% of participants highlighting it as a critical factor. Despite the challenging environment, there is optimism regarding the availability of debt and equity in 2026, particularly from family offices and private equity funds. The shift towards smaller cities and niche sectors is also becoming prominent, indicating a need for diversification in investment strategies.

The report ranks major cities based on investment prospects, with London, Madrid, Paris, and Berlin leading the list. These cities are favored due to their market size, liquidity, and strong economic fundamentals. Emerging cities like Madrid are gaining attention for their growth potential and resilience amidst uncertainty.

Sustainable housing is at the forefront of discussions, with a growing emphasis on environmental sustainability and decarbonization. The report underscores the importance of integrating sustainability into real estate strategies, with many leaders advocating for clearer benchmarks and public-private partnerships to address housing crises and promote affordable housing solutions.

The report concludes that for Europe to enhance its competitiveness, the real estate sector must reframe its value proposition. By embracing innovation and sustainability, the industry can play a pivotal role in economic growth and social stability. As geopolitical tensions shape market dynamics, the need for robust public-private collaboration will be essential in unlocking Europe's potential for sustainable housing and urban development.