European Real Estate Investment Grows 6% in the First Quarter of 2025
- Redação Mudei e Agora
- Aug 11
- 2 min read
The European real estate sector began 2025 with clear signs of recovery. According to data released by CBRE and cited by CNBC, investment grows 6% in the first quarter, totaling approximately €45 billion. This is a significant result, considering the macroeconomic context still marked by global uncertainty and political instability.
Lower interest rates boost the market
One of the main reasons for this recovery is the more accommodative monetary policy adopted by the European Central Bank. The gradual reduction in interest rates throughout 2024 and early 2025 stimulated lending and improved financing conditions. This led institutional investors and international funds to once again look at real estate assets with greater appetite.
Best-performing segments
The study shows that the multifamily housing market and student housing saw a 43% increase in 12 months, becoming the most sought-after segments. Demographic growth in university cities and the shortage of housing for young people are driving the appreciation of these assets.
The retail sector also surprised positively, with a 31% increase year-to-date and 26% in the quarter alone. This movement is attributed to the adaptation of physical commerce to omnichannel and improved consumer confidence.
The hotel sector saw 23% growth, fueled by European tourism, which remains robust. Industrial and logistics grew 19% and 16%, respectively, reflecting the expansion of e-commerce and the need for strategic distribution centers.
The only segment that experienced a decline was healthcare real estate, influenced by budget cuts and regulatory uncertainty.
Impact of Trade Tensions
Despite the positive results, the CBRE report warns of a risk on the horizon: the imposition of new trade tariffs by the US on European products. This measure could affect investor confidence and generate currency instability, undermining optimistic forecasts.
Most Attractive Cities
Among the most sought-after markets in early 2025, Berlin, Paris, Madrid, and Lisbon stand out. The Portuguese capital, in particular, has attracted funds specializing in medium- and long-term rental housing, benefiting from the demand from expatriates and digital nomads.
Trends for the Rest of 2025
CBRE predicts that the total investment volume in 2025 could exceed €250 billion, provided macroeconomic conditions remain stable. Investment in alternative assets, such as data centers and buildings with top-tier environmental certifications, is expected to gain momentum.
The focus on sustainability is increasingly evident. Investors demand buildings with certifications such as BREEAM and LEED, not only for environmental reasons, but also to ensure greater liquidity and future asset appreciation.
What this means for Portugal
For the Portuguese market, this European growth has an indirect positive effect: it increases the country's visibility as a safe and attractive destination. With prices still competitive compared to other Western European countries, Portugal is poised to attract a growing share of international capital.
Meanwhile, the challenge remains the limited supply of new properties in central areas, which puts pressure on prices and affects affordability. Faster licensing programs and tax incentives could be crucial to making the most of this recovery phase.
Source: CBRE via CNBC
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