Large investors drive up house prices in Europe’s cities, study finds
The rate at which institutional investors, such as private equity and pension funds, are buying up housing is accelerating in major European cities, driving up house prices, research suggests.
The volume of purchases in Europe hit €64bn (£53bn) in 2020, with about €150bn worth of housing stock conservatively estimated to be in the hands of such large investors.
Berlin, with €40bn worth of housing assets in institutional portfolios, double the value found anywhere else in Europe, is at the top of the league table, followed by London, Amsterdam, Paris and Vienna, according to analysis of the Preqin private database of investors, funds and large transactions.
The research carried out by Daniela Gabor, professor of economics and macrofinance at the University of the West of England, and Sebastian Kohl at Berlin’s Free University, suggests Europe’s housing has become an increasingly attractive “asset class” for investors in part due to near-zero interest rates and an encouraging regulatory framework.
European central bank data shows that real estate funds in the Eurozone reached €1tn in 2021, the size of Spain’s GDP, from about €350bn in 2010. Within that, residential assets are said to be an increasingly important part.
Between 2012 and 2021, the number of major residential transactions involving institutional investors increased the most in Germany (from 16 to 92), Denmark (two to 13) and the Netherlands (two to 60).
The private equity company Blackstone, the world’s largest institutional landlord, manages about $730bn in funds globally, of which $230bn was allocated to real estate in September 2021. Blackstone, which posted record profits in October 2021, owns 65,000 residential units across five European countries.
A Blackstone
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