Just over a decade ago, the world saw an economic crisis and nations and businesses have had to work hard to claw back to solid footing. Across Europe, the real estate market was hit hard. However, since 2016, the majority of European countries have been able to pull their property markets back up to pre-crisis levels. Countries like Portugal and Hungary have even gone well above the average for property prices in Europe.
In 2020, the world was hit by another crisis and many in the property business feared another recession may come their way. The global health crisis has had a far-reaching impact on many industries. However, the property and real estate industry is not one of them.
2021 Was A Bumper Year
Despite the uncertainty faced by the world throughout 2020 and 2021, the property market globally seems to have been unphased. In fact, the tides turned in 2021 and real estate investments went up 50% from the previous year’s figures. 29% of all property transactions in the last half of 2021 were in the residential sector, showing that it is more than just investors buying property. Investors are also looking to diversify more and seem to be purchasing in residential areas as well as in industrial or office sectors.
One of the major theories abounding about why residential property is doing so well with those buying for personal use is that people have more budget. Many of those who haven’t experienced a loss or dip of income due to the pandemic have been able to save more. This is due to holidays not being taken and many social activities being postponed or cancelled under lockdown regulations. In other words, people now have the choice and ability to invest their unspent holiday budget.
Residential Construction On The Rise
Looking across Europe, there are a number of countries facing housing shortages, especially in the cities. The United Kingdom is particularly hit hard by this, and construction here has been largely halted over the last two years. This has led to house prices increasing quite significantly across the country.
On the continent, things are looking a little different. Countries like Germany and Portugal opened up again for residential construction in 2021. This has brought an end to the dip in new dwellings being registered that was seen in 2020 during the heavier lockdowns. In Germany, 2021 saw an increase of dwelling permits of 4.8% compared to the previous year. In time, this should even out the supply and demand issue.