European property market strengthens growth in 2026: Italy emerges as the second fastest-growing market in Europe

As per the European Outlook 2027 report unveiled at the 34th Scenari Immobiliari conference in Rapallo, the real estate sector in Europe has successfully navigated through the repercussions of the pandemic era and is advancing towards an overall revenue target of 1,360 billion euros by 2027.

The examination delves into the operations of the top five nations on the continent, where the total transaction value is set to surpass 1,030 billion euros by 2026. Among the prominent European markets, Italy is displaying the most vibrant performance, trailing only behind Spain in terms of growth momentum.

The surge was evident in the second quarter of the year:

• EU Transaction volume: hit €53 billion (+6% compared to the previous year).
• EU Investments: surpassed €100 billion (+3% year-over-year).

Despite global geopolitical tensions affecting individual decision-making, the industry's overall recovery remains steadfast.

Growth Catalyst - the Mediterranean Region

The southern area has emerged as a hub for investments in Europe. Spain is witnessing robust growth, closely followed by Italy. While Germany and France maintain their dominance in terms of magnitude and stability, their growth rates are notably more subdued.

Mario Breglia, President of Scenari Immobiliari: “The European real estate sector is once again proving its resilience against external economic uncertainties. Our report symbolizes a 'candle in the wind'. Despite strong geopolitical, financial, and energy headwinds, the sector remains unswayed. Real estate is solidifying its reputation as a dependable vehicle for investment, asset preservation, and urban evolution.”

Italian Achievements: Revenue Surge and Capital Influx

Italy has cemented its position as the second most appealing primary market in Europe. The country's market is anticipated to expand by 8.7% in 2026 and 9.8% in 2027.

The key to this success lies in a favorable blend of revenue, transaction volume, and property valuation. However, analysts stress that not all properties will reap equal benefits from this new phase of growth. High-quality, energy-efficient assets in strategic locations that align with demographic, digital, and logistical trends will emerge victorious.

Residential Sector: Heading towards 840,000 Transactions

The residential domain is steadily recovering post the 2023 downturn:

• Transaction volume: By 2027, the count of residential property transactions in Italy is projected to reach 840,000 (with an annual growth rate of 4-5%).
• Premium segment: Prime and Superprime categories, concentrated in Milan, Rome, and key resort areas, play a pivotal role.
• Price index: The index is on the rise in major cities and secondary regional hubs. It is expected to climb from 110.8 (in 2025) to 121 (in 2027), showcasing an average annual growth of over 4%.

Record-breaking Investments in Italy

In the initial half of the year, the real estate investment volume in Italy surged past 7 billion euros, marking a new historic peak (a leap of more than 30% compared to the same period last year). The country has secured a position among the top 10 global destinations for foreign capital.

Dynamics across Key Sectors:

1. Logistics: A remarkable turnover of 5.3 billion euros was registered (+6% year-on-year). Simultaneously, construction and investments are shifting towards the southern regions of the country, identified as having significant potential by analysts.
2. Hotel sector (Hospitality): Witnessing swift recovery due to active participation of institutional investors from Italy and overseas. Rome and prime tourist destinations contribute substantially to the overall figures.
3. Office real estate (Terziario): Experiencing moderate growth with a strong emphasis on the demand for eco-friendly Class A buildings with high energy efficiency.