European residential markets experience solid growth

Europe’s residential markets continue to experience solid growth in spite of concern about increasing affordability issues, mounting household debt and the sustainability of current price growth in a number of countries.

In most markets price growth has slowed, however the underlying demographic, economic, financial fundamentals remain healthy which suggests a hard landing is unlikely. Exceptions to this could occur in localised areas which have seen and continue to see substantial new development and which risk possible oversupply if recent levels of construction are sustained.

Indeed, there are factors which point towards a further demand boost in those markets – predominantly in central and southern Europe - which have limited mortgage penetration and which are experiencing strong economic expansion.

The appetite for second homes, whether for personal use or for investment reasons, continues unabated, facilitated by ever increasing accessibility via new low cost air routes and the growth in supply of residential properties in both the mass and luxury sectors.

Growing buyer awareness of market trends and performance and a willingness to undertake more detailed research before committing to purchases.