DESPITE A YEAR OF EXTREME CRISIS, THE EUROPEAN HOUSING MARKET HAS REMAINED STRONG
- 62% of Europeans feel confident in the strength of their local property market in 2021.
- 50% of RE/MAX regions surveyed show that buyers, referred to as move-over buyers,
are looking to relocate to rural areas.
- 67% of RE/MAX regional owners indicate that first-time buyers and move-over buyers
will likely be the primary drivers of the housing market demand in 2021.
2021 European Housing Report: Strong price growth and lifestyle changes are evident
As Europe continues to navigate the new realities sparked by the COVID-19 pandemic, housing markets across the continent are showing signs of continued growth. According to the 2021 RE/MAX European Housing Report, strong price growth, averaging in the mid-to-high single digits, is anticipated in many regions, with both first-time buyers and move-up buyers continuing to drive market activity.
“Across Europe, we’re seeing a lot more move-over buyers due to lifestyle changes brought-on by COVID-19,” says Michael Polzler, CEO of RE/MAX Europe. “These buyers are longing for more space within their homes, wanting to be closer to green spaces, as well as seeking out larger properties in rural areas. Our agent network in these areas is busier than ever, and we expect this lifestyle trend to continue throughout 2021.”
- First-time buyer: someone who buys a property for the first time.
- Move-up buyer: someone who buys a property that is larger and
more expensive than the house that they already own.
- Move-over buyer: someone looking for a better deal on a property,
even if it takes them out of their current city/neighborhood/region.
The impacts of COVID-19 on the European housing market
According to a Maru/Blue survey conducted on behalf of RE/MAX Europe, 30% of Europeans have considered moving since March 2020, and 40% of Europeans will consider engaging in the property market in 2021 to buy or sell. This sentiment is strongest in Spain (58%), Portugal (50%) and Turkey (43%).
In many countries across Europe, the COVID-19 pandemic has caused shifts in both market activity and buyer preference. According to the survey, 37% of Europeans have considered moving to a more rural community since March 2020. This trend has been evident in countries like Austria, Italy and Finland. Many city dwellers are now looking for more space, seeking out larger properties in rural areas. This is partly due to Europeans working from home and wanting more space to accommodate a home office.
For some Europeans (35%), the COVID-19 pandemic has made them more interested in buying or selling. This sentiment is strongest in Turkey (60%) and Spain (56%).
“The pandemic’s influence on the European property market will be prominent for the remainder of 2021,” says Polzler. “Our network is tapping into technology to ensure a safe and secure transaction process, such as the use of e-signatures and virtual tours. These technological advances are vital to the health of the industry, especially as we continue to face the new COVID-19 realities.”
Overall confidence in Europe’s housing market is strong
According to the survey, despite the disruptions caused by the virus, 62% of Europeans are confident in the strength of their local property market, and 59% feel confident in the strength of the European property market as a whole. These sentiments are strongest in the Netherlands, at 75% for their local market and 73% for the European market. Overall, the majority of Europeans (55%) believe that the property market is functioning well.
Key factors driving market activity
RE/MAX regional and broker owners were asked to provide an analysis of their local property market activity in 2020, as well as a forecast for 2021. Some 65% of RE/MAX regional and broker owners surveyed are anticipating a seller’s market for the remainder of 2021, based on strong pricing growth.
While apartments and single-family homes are seeing the most activity across Europe, recreational properties are the most in-demand properties in Greece, the Czech Republic, Italy and Slovakia, with move-up buyers generating most of the demand in these regions. Luxury properties are the most in-demand property type in Norway and Poland, with the luxury property market remaining steady in regions like Romania and France. This is expected to continue throughout 2021, especially as more buyers consider lifestyle changes due to COVID-19.
Livability in Europe
Livability is defined by the neighborhood factors that contribute to quality of life. According to the survey, the top five most important livability factors currently preferred by respondents in Europe are: proximity to green spaces and local shops, affordability, proximity to work and public transportation. Some countries rank proximity to good schools as the number one factor, such as Austria, Belgium and Germany.
Neighborhood livability plays a significant role in the home-buying process, contributing to the relocation trend that has emerged in the midst of the pandemic. A large majority of Europeans (69%) believe that neighborhood livability was an important factor in their decision to move to their current home. The survey also found that, of those who have considered moving since March 2020, 39% would stay within their current neighborhood.
Europe’s tourism industry was virtually upended in the wake of the coronavirus, and this has had lasting impacts on the livability of some of Europe’s busiest tourist destinations. In fact, 43% of Europeans believe that the lack of tourism since the start of COVID-19 has improved the well-being and overall livability of their neighborhood. This sentiment is strongest in Turkey (67%).
Additional findings from the 2021 RE/MAX European Housing Report
- 3% believe that prices will increase
- 32% believe that prices will stay the same
- 15% believe that prices will decrease
- Switzerland (85%)
- Norway (72%)
- 15% believe that prices will decrease