The Biggest EU Property Market Trends in 2023
Written by Marc Taverner, COO at XEROF
According to a PwC analysis, real estate investors will prioritize long-term stability and redouble their efforts to improve the functioning of the sector in 2023. The formula for what makes a good deal has changed, but there are still plenty of opportunities for development and a strong return on investment.
So what are the key predictions for the development of the real estate market in Europe this year? In this article, we take a look at the future of leasing, luxury real estate, commercial real estate, inflation, and how cryptocurrencies will impact real estate transactions.
Even though leasing activity in Europe did quite well in 2022, the consensus is that a recession will lead to a decline in occupancy and rents, even in previously healthy sectors. However, the real estate market is always in flux, and those who update their portfolios will be rewarded in 2023.
Residential real estate continues to be highly valued as it is expected to provide stable returns. The European luxury residential real estate market has drawn a crowd of investors and developers who have flooded the market, increasing competition and prices and raising both the demand and supply of properties.
Luxury Real Estate
In a real estate study, Forbes Global Properties found that the luxury property sector is protected from the effects of rising inflation due to wealthy buyers being less sensitive to interest rate increases as they rely less on credit. A five-year analysis proved this by showing a 34% increase in the top 20% of transactions in 2022.
Outside the EU, Miami, Dubai, Melbourne, and some US states recorded the highest residential transactions ever in 2022.
The luxury real estate market is forecast to command high prices in 2023 in the world's major metropolitan areas, where high-net-worth individuals place a high value on outdoor living spaces and easy access to lifestyle amenities.
Commercial Real Estate
According to Yahoo, Europe's commercial real estate industry is expected to increase by $80.59 billion between 2022 and 2027. In fact, the market is expected to grow at a CAGR of 5.55% during the forecast period.
During this period, the demand for office space is also expected to grow significantly. Office jobs account for 35% of all new jobs created globally, which will fuel the market expansion. In addition, economic and employment trends are predicted to increase the demand for office space. Therefore, it stands to reason that expanding the office market will increase demand for commercial real estate in Europe.
How Will Inflation Impact the Property Market?
Every aspect of the real estate industry will be affected by inflation. Nevertheless, most industry experts believe that real estate investing still has a bright future, partly because the asset class has traditionally been viewed as an inflation hedge. The coming year could provide a fantastic buying opportunity for core investors who are still underinvested in the industry, given the likelihood of falling valuations.
Crypto and Real Estate Transactions
Similar to a PayPal transfer, buying a house with crypto can be done almost instantly. A "smart contract" is used to complete transactions on a blockchain by specifying certain conditions, such as when the digital currency must be converted to dollars.
In addition, cryptographic transactions on a blockchain have the ability to prevent fraud and promote more openness, as nothing in a blockchain transaction can be modified or altered. This provides a tremendous advantage for real estate transactions, especially at the high end, as many buyers and sellers want to remain anonymous and keep their transactions as private and secure as possible.
XEROF allows crypto investors to purchase real estate with their digital assets easily.
One of its most notable features is the platform's ability to settle a crypto-to-fiat transaction to a third-party account. As a result, users of the platform can effortlessly buy real estate with cryptocurrencies, track the status of the transaction, and speak with their own personal account manager at any stage of the process if they have any questions.
Customers can feel secure and in control while using cryptocurrencies to fund their real estate transactions by using XEROF.
Furthermore, XEROF will also be launching a special Real Estate Partner Program very soon. This program will allow real estate agencies to bundle their real estate business and crypto payments, which will, in turn, increase revenue and encourage customer loyalty.
XEROF is the best partner for real estate agencies as we offer innovative and secure solutions when it comes to buying and selling real estate for high-net-worth individuals. So watch this space for further updates!
If you would like to be the first to learn more about this exciting initiative, please contact us here.
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