European living offers attractive opportunities for investors, says Jasper Petit, Managing Director International Investments. Differences in regulation, demographics and market structure make investing in these markets complex, but also offer opportunities for diversification and a resilient long-term return.

For many institutional investors, residential real estate in their home market is tamiliar territory. But there are good reasons to also look beyond national borders. This offers diversification benefits, as the portfolio becomes less dependent on one economy or certain demographical and political developments. Moreover, Europe offers access to cities and target groups where housing demand is developing in a different and attractive way. An additional advantage for euro-based investors is that eurozone markets carry no currency risk.

Structural growth in demand for rental housing

For the period up to 2036, we expect average household growth of 0.37% per year in Europe, partly due to more single-person households (source:

Oxford Economics). More homes are therefore needed, even where the population is barely growing. Meanwhile, people are still moving to the growing cities for work and study, while space for new construction is limited. Demand is growing faster than supply. For many households, high purchase costs are an obstacle, making renting the most feasible option.

This combination supports lettability. For residential properties in Amsterdam, Berlin, Brussels, Copenhagen and Stockholm, we foresee structural vacancy below 3%. Broad tenant demand can provide a basis for stable income, even when the economy is struggling. In addition, rent adjustments can offer partial protection against inflation, insofar as contracts and regulation allow.

Rental regulation differs from country to country and can change, sometimes at short notice. Navigating these different regulatory environments can be challenging, but it also creates opportunities for investors who are able to adapt. Interest rates are likely to remain elevated for some time, which calls for discipline on entry prices. Even so, the long-term fundamentals of European living are strong. That is why we believe that entering this market at the right price is one of the greatest long-term investment opportunities.

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