News / Insights

In 2026, the European real estate market is shifting from cautious optimism to a more pragmatic approach, against a backdrop marked by geopolitical tensions—from Ukraine to the Middle East—and instability in U.S. trade policy.

According to the ULI report with PwC, which reflects the views of 1,276 European real estate professionals, 77% of industry professionals say they are concerned about European economic growth, while 72% fear a global slowdown. “Deglobalization,” considered a marginal risk until a few years ago, is now a significant concern for 70% of respondents. Concerns about inflation (51%) and interest rates (49%) have decreased compared to 2025 but remain central, while attention to cybersecurity (64%) is growing. In this context, the majority of market participants anticipate an increase in the availability of debt and equity, thanks in part to the return of bank credit and the entry of new private capital such as family offices and private equity funds.

Investors maintain a selective approach, focusing on markets with solid institutions and high liquidity. London, Paris, Berlin, and Madrid remain the most attractive cities for the fourth consecutive year, while Milan holds steady in seventh place, valued for improving fundamentals and greater price competitiveness; Rome, meanwhile, climbs back to 16th place. Market size and liquidity are the primary criteria for 29% of respondents (and among the top three for 56%). Among sectors, residential remains the most popular, accounting for five of the ten most promising segments—including student housing, co-living, and affordable housing—while data centers, new energy infrastructure, and student housing lead the overall ranking. Artificial intelligence stands out as the main driver of transformation: 75% of operators already use it in their real estate activities, up from 51% the previous year, with applications in marketing, property management, and asset management.

Sustainability remains a priority, but with a more pragmatic approach: 55% of respondents consider it a top concern, down from 67% in 2025, while acknowledging that energy efficiency remains crucial for accessing financing. About half of respondents believe that greater regulatory clarity on sustainable assets and targeted tax incentives could better align real estate with European growth objectives. Only one in five operators currently considers the sector fully aligned with the role of economic and social engine outlined in the Draghi report, but awareness is growing of its potential to strengthen European competitiveness through innovation, urban regeneration, and public-private collaboration.

Read the report