The real estate market in Europe is proving to be somewhat of a safe-haven, even in times of crisis. In spite of the coronavirus pandemic affecting much of the world, including Portugal, international investors still have Europe in their sights when it comes to real estate investment. Lisbon, which in 2019 was considered the best European city to invest in real estate and by 2020 was ranked 10th, has once again dropped down the rankings and now ranks 15th. There have also been some new additions to the list of the most attractive European cities to invest in the real estate sector in 2021.
According to an annual study called Emerging Trends in Real Estate which is carried out by PwC and the Urban Land Institute, real estate is still a popular investment route in spite of COVID-19. The study features the input of investment funds, developers, property companies and other market players in this time of economic uncertainty throughout Europe.
Berlin stands out as the most attractive city for investment in 2021: the podium is completed by London and Paris in second and third place respectively. The German capital comes out on top thanks to factors such as its consolidated office market, as well as the effective measures the German government has implemented to halt the advance of COVID-19. Berlin previously topped the ranking in 2018, while in 2019, Lisbon beat the German city to take the top spot as the best city for investment in Europe.
The study, which is in its 18th edition, concluded, that the COVID-19 pandemic "has transformed the way people live and work", adding that "European property owners recognise all aspects of the property sector have been 'interrupted' by the pandemic and the result is greater turbulence in business. This is an extremely challenging time for European real estate, which first dealt with a strong recession in 2020 and now faces the prospect of a prolonged and fragile economic recovery, with the additional threat of new waves of the coronavirus," the report reads.
In addition to Lisbon, the Spanish cities of Madrid and Barcelona also feature, although both cities have dropped positions to 8th and 13th respectively. "The outlook for southern European cities has definitely seen a downturn, simply because the economic challenges following the pandemic are too high to justify a rapid recovery," said one of the experts quoted in the study, warning that these 3 cities, Lisbon, Madrid and Barcelona, are cities that depend heavily on the tourism sector, an area that been hit hard by the coronavirus.