Why are changing lifestyles reshaping the real estate market across Europe?

Why are changing lifestyles reshaping the real estate market across Europe?


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The property landscape in cities across Europe is being transformed by changing lifestyle patterns, growing affordability pressures and delayed life milestones, according to JLL’s new European City Dynamics research.

Socio-economic shifts, including a growing number of students and retirees living in urban hubs, as well as shrinking household sizes as more people live alone, have kickstarted a new era of living across Europe.  

The report found that, whilst continued urbanisation is causing city populations to rise exponentially, modern social behaviours are leading to a significant shift towards smaller properties.

Single person households in European capital cities are 6.8% higher than in their respective countries, partly driven by increases in the average age of when people get married and start a family.

Additionally, higher education is on the rise across Europe’s major countries, with Spain reporting one of the highest tertiary education enrolment rates, at 91.2%, a huge increase from 57.6% at the turn of the millennium.

There has also been a considerable growth in the purpose-built student accommodation (PBSA) market to cater for these rising student numbers and their preference for hotel-like accommodation with high amenity provision in city centre locations. This is especially visible in cities with a high concentration of students such as Barcelona.  

The research also revealed that property expectations ingrained in the student years are influencing accommodation choices for young and middle-aged professionals, with over 60% of urban Europeans now living in flats, a trend fuelled by both lifestyle preferences and economic pressures.

An average of one in eight households, for example, are being financially stretched when it comes to rent or mortgages, spending more than 40% of their income on housing costs.

Chronic undersupply – coupled with house prices and rents growing ahead of earnings growth – is helping to make the urban affordability crisis more acute.

“Developers and operators are facing growing demand for more varied housing solutions,” Phil Wedge-Bernal, EMEA Living Research & Strategy Associate at JLL, said.

Shifting population dynamics and affordability pressures across Europe mean that people are looking for a wider range of living products that suit smaller households and lifestyle needs. Fast-emerging co-living and multifamily [Build to Rent] sectors offer solutions to these challenges.”

Germany, for instance, is introducing new retirement living products to complement a relatively established multifamily and student sector, whilst Spain is growing in multifamily and student assets.

Adam Challis, head of EMEA Living Research & Strategy, added that modern housing needs to evolve to meet the new era of living in Europe, ‘because it is critical to support current and future urban populations’.

“Progress is already underway, with permissions for multi-dwelling buildings rising by nearly 31% since 2015,” Challis said.

“The over-65 European demographic requires particular attention, as it is set to increase by 22 million by 2030. Whilst cities are not ageing as quickly as out-of-city locations, there is a significant opportunity for operators, developers and investors to plan and develop solutions now, to ensure this growing cohort is accommodated in our increasingly diversified future urban environments.”

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