European housing markets react calmly, but not uniformly to Covid-19
European housing markets have in the main, reacted calmly to the Covid-19 crisis, but differences are apparent, according to new analysis by Catella Research.
The company say that housing markets have positioned themselves well compared to spring 2020, ie before Covid-19. Demand in the housing market has traditionally been relatively insensitive to exogenous shocks and policy makers in most countries have reacted strongly and quickly.
It is also clear that Covid-19 has led to massive inequalities between sectors, economies, companies and countries across Europe. Transaction volumes and price development vary from country to country. There are slightly increasing market returns in strongly affected areas, but overall returns are stagnating and even decreasing in some cases. A total of 19 countries and 61 locations were analysed.
Professor Dr Thomas Beyerle, Head of Research Catella Group, says: "The view that European residential real estate continues to be very attractive to investors seeking good diversification opportunities and a balanced risk/return portfolio in the European markets has not changed. Large Conurbations, Gateway Cities or the Capital of any country remain the most desirable markets with positive socio-economic development and further price increases. However, this positive development is reflected in declining returns. On the other hand, however, these markets are significantly more volatile and heterogeneous than the second-tier markets, especially in times of markedly changing economic conditions.“