« While the current fragmentation of the political landscape in several of the world’s major economies is ’detrimental’ to government effectiveness, we are maintaining our scenario of a pivotal 2024 leading to a gradual recovery in the European real estate sector during 2025. The continued reduction in ECB interest rates, the level of savings amongst Europeans and the recovery of the real estate markets between 2022 and 2024 all point to the potential for improvement and a rebound in the sector. »
Henry-Aurélien NATTER, MRICS, Director of Research Europe
World growth is currently forecast at +3.3% for 2025, a slight improvement on 2024 (+3.2%). While economic activity in the United States will be determined by Donald Trump’s economic policy decisions, these will also have global repercussions. Similarly, China will probably need to step up its fiscal support to boost activity. Finally, while the outlook for the euro zone has improved, possible trade tensions with the US, lack of productivity gains and regional conflicts are all risks weighing on the economic outlook.
For the time being, GDP growth in the euro zone is positioned at +0.8% in 2024, and we anticipate a rebound (+1.2%) in economic activity in 2025 The euro zone economy is expected to grow as the restrictive effects of the ECB’s monetary policy gradually ease. Spain’s GDP is expected to rise by +3.0% in 2024 and +2.4% in 2025, followed by France (+1.1% and +0.8%), Belgium (+1.0% and +1.2%), the Netherlands (+1.0% and +1.3%), Italy (+0.5% and +0.8%) and Germany (-0.2% and +0.3%)
The European Central Bank once again cut its deposit rate by a quarter of a point in December 2024, to 3%, even though inflation picked up a little at the end of the year to 2.4% year-on-year. While in September the lack of indications characterised the direction of the Frankfurt-based institution’s next strategic choices, certain indicators have reinforced our view that the ECB is now ready to do what is necessary to support the economy in the face of an uncertain economic climateWe believe that the ECB will move closer to its neutral rate, which neither speeds up nor slows down the economy, and which will be a positive factor for real estate. However, the risks are increasing, and a pick-up in inflation from the US should be monitored in 2025. This trend could be amplified by a currency effect.
Political uncertainties and government budgetary issues remain a risk. Solutions will have to be found to reduce the pressure on the sovereign bonds of certain European countries
Sources: data Praemia REIM Recherche et Stratégie, Immostat, CBRE, Savills, BNP PRE, JLL, Knight Frank, MSCI, Oxford Economics, Eurostat, Econpol Europe, OCDE, FMI, Stabel, NSI, CZSO, DST, Destatis, Stat, CSO, Statistics, INE, INSEE, DZS, ISTAT, CSB, Statistics Lithuania, Statec, KSH, CBS, Statistik Autria, Stat Poland, INE, INSEE, Statistics Finlande, SCB, SSB, BFS, ONS, STR, Opérateurs, associations nationales du e-commerce, Statista
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