Real estate in Europe: An overview of current market trends

Real estate in Southern Europe and the Alps

A closer look at European regions reveals that substantial capital is flowing away from traditional major cities toward sunny destinations and stable winter retreats.

Luxury real estate in Italy

Italy has become one of the strongest magnets for international wealth. Despite the increase of the flat tax on foreign income to 300,000 Euros annually, interest in exclusive residential property remains immense. Because the available inventory in Milan's already tight market is hardly sufficient, buyers are increasingly pivoting to Rome, Tuscany, and the highly desirable shores of Lake Como.

Spain and Portugal

The Iberian Peninsula is recording outstanding growth in value compared to the rest of Europe. Locations like Porto and Marbella are particularly attractive to many buyers from Northern Europe and the US. With top international schools and excellent travel connections, these markets stand out as ideal destinations for relocation.

Property in the Alps

Alpine retreats such as Verbier, Gstaad, and Courchevel are proving to be exceptionally resilient in value. Buyers looking for property in the Swiss Alps value the political continuity and currency safety that provide long-term market stability. The financial hub of Zurich benefits significantly from this trend as well.

Luxury properties in European cities

The dynamic nature of urban city centres is currently heavily influenced by shifting tax frameworks.

London and the Non-Dom Effect

The most prominent example of this current shift is London. Because the traditional non-dom tax status has been abolished, a portion of wealthy residents is relocating their primary lives. This historic tax rule previously allowed foreign nationals to keep their global wealth tax-free outside of the UK. With this advantage gone, investors are searching for new fiscal alternatives on the continent.

However, a wave of panic selling has not occurred in the premium segment. Many owners are keeping their homes as a secure, long-term asset and are placing them on the rental market instead. Nevertheless, buyer requirements are shifting. Rather than massive primary residences, there is an increasing demand for practical, smaller apartments used as flexible second homes for short business stays.

Frankfurt and Paris benefit from shifting wealth

The capital leaving London is visibly flowing into continental European alternatives. International investors are showing strong interest in properties across Frankfurt as well as exclusive apartments in Paris.

Buying exclusive property: New trends and lifestyle

The expectations of modern buyers have changed fundamentally. Today, luxury is primarily defined by time savings and flexibility:

• Second Homes: Wealthy individuals rarely bind themselves to just one fixed location anymore. They often use major cities only for a few days at a time for business or culture, while keeping their official residence in a more tax-efficient region. This has caused an immense surge in demand within the luxury rental market, leading to substantial rent increases in top-tier European city centres over recent years.

• Branded Residences: In light of rising construction costs and bureaucratic hurdles, international buyers are avoiding complex renovation projects. Perfection is expected from day one. This explains the projected growth of these hotel- or designer-branded luxury residential complexes. They guarantee buyers a tailored, stress-free ownership experience, exceptional building standards, and five-star concierge services.

Engel & Völkers as partner for the European premium market

The luxury real estate market operates largely independently of standard economic cycles. Because the vast majority of transactions in the highest premium segment are completed entirely with equity and without bank loans, the market remains highly resilient to interest rate changes. The combination of an extremely limited supply in absolute prime locations and the desire for long-term wealth preservation will continue to secure the value stability of premium European properties in the future.

In such a dynamic and sophisticated market, deep expert knowledge is the key to success. Thanks to the global network of Engel & Völkers, you gain access to the most exclusive properties in Europe's most sought-after regions. Our local experts are always ready to guide you and provide tailored solutions to help turn your property dreams and investment goals into a reality.