Real estate: what happened this summer in Europe?

The summer of 2023 was a milestone for the entire real estate market in Europe. The combination of economic, social, and environmental factors have influenced the purchase, sale, and rental of real estate throughout the area.  In this article, we will take a close look at the main events and trends that shaped the European real estate sector during the summer and set the trend for the start of the school year. 


1 - Interest rates continue to rise 

Interest rates continued to rise across the board in Europe during the summer of 2023, making access to mortgages increasingly complicated. Indeed, borrowers are no longer benefiting from the historically low rates that we experienced two years ago, and find themselves in sometimes incredible situations. This is not helping to stimulate demand for housing. Thus, the very rapid rise in the interest rate instilled by the European Central Bank (ECB) has slowed from -0.5% to 4% in just over a year.  


This is causing a slowdown in all European real estate markets, both in residential and commercial real estate. Buyers are increasingly reluctant to buy a property, as interest rates considerably increase the total cost of acquiring a property. We were able to see a drop in sales of around 25% in the Paris region during the second quarter of 2023. But also a 26% drop in building permit applications in Germany in May 2023 compared to May 2022. There is a general decline in the real estate market all over Europe. 

2 - The growing demand for sustainable housing

The summer of 2023 saw an increase in buyers' interest in sustainable and eco-friendly homes in Europe. Buyers are increasingly aware of the importance of reducing their carbon footprint, which has driven demand for eco-friendly homes and energy-efficient buildings. In a context where energy prices remain very high, so-called green technologies (solar panels, energy management systems, etc.) have become attractive features for potential buyers. Indeed, they see it as a way to make a gesture for the environment but also a way to save money in the medium / long term. 

3 - Economic constraints related to building materials

The summer of 2023 was also marked by economic constraints regarding building materials in Europe. The prices of raw materials and therefore building materials increased in 2021 and 2022. This increase is slowing down in 2023. However, materials that require a lot of energy to manufacture continue to experience higher production costs. This is the case for tiles, PVC joinery, mirrors and glazing.  


Although there is a relative stabilization of prices for other materials, the building, construction and real estate sector are suffering the consequences. With delays in certain projects, and price increases in new buildings; these different sectors are looking for solutions with their various interlocutors and partners. 

4 - Changing real estate regulations 

Many European countries introduced or changed real estate regulations during the summer of 2023. Some areas have imposed restrictions on short-term rentals and tourist rentals, while others have introduced tax incentives to encourage energy retrofits of existing buildings. These regulations have had an impact on the way investors and owners manage their real estate. 

5 - The redefinition of urban areas 

The summer of 2023 saw a redefinition of some urban areas in Europe. Many cities have sought to rethink their design to meet the changing needs of the population. This is particularly the case with regard to green spaces, sustainable mobility and urban densification. These initiatives have had an impact on the demand for housing in some areas. 

6 - Technological innovations  

Technological innovations have continued to shape the real estate market in Europe. Virtual tours, 3D modeling, and electronic signatures modernize the process of buying and selling real estate. 


Virtual tours make it easier for users to view spaces in 3D. This provides the opportunity to view properties remotely, which improves the buyer experience and saves real estate agents time. 


Big Data, on the other hand, makes it possible to collect and analyze a multitude of information relating to the real estate market. This helps real estate agents better meet their clients' needs and make strategic decisions. 


Blockchain also comes into play. It is a major and emerging technological innovation in the real estate sector that makes it possible to secure information related to real estate transactions and maximize trust between stakeholders. 


The introduction of these new technologies makes it easier to find and buy real estate remotely. 

7 - Foreign investment 

The summer of 2023 saw a notable increase in foreign investment in Europe. Many international investors have perceived the European real estate market as a safe haven for their capital, especially in major cities and tourist areas. This foreign demand has boosted prices in some regions. 



In conclusion, the summer of 2023 was a period of transition for the European real estate market, marked by a growing demand for sustainable housing, persistent challenges related to the economic context, rising interest rates, the integration of new technologies in the buying and selling journey of real estate, constraints related to building materialsever-changing regulations and a redefinition of urban areas. These trends are likely to continue to shape the European property market through the end of the year and into the future. According to some experts, the recovery of the European economy is on the horizon in 2024. This is good news for the European real estate market. 









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