Residential real estate has maintained its position as the most attractive sector for real estate investment in Europe, according to global real estate services provider CBRE’s European Investor Intentions Survey 2026, as investor confidence continues to grow and expectations for transaction activity rise. For the second time in a row, Living leads the ranking. The asset class continues to benefit from strong structural demand, limited supply and favourable long-term fundamentals, putting it ahead of logistics and office for both domestic and cross-border investment. The entire results of the survey can be found on the CBRE website.
Investor confidence rises – 2026 as a key year for market recovery
“Increased investor confidence in European real estate reflects stabilizing prices and broader availability of debt capital. As the price expectations of buyers and sellers continue to converge, 2026 is likely to be a crucial year for the recovery of the market,” says Dr. Jan Linsin, Head of Research at CBRE in Germany.
“Residential real estate continues to be a clear focus of investment strategies, while capital is increasingly focused on markets with solid fundamentals and long-term growth potential,” says Filip Hejnal, Head of Equity Placement at CBRE in Germany.
The survey also shows an improvement in market sentiment, with investors citing falling financing costs and attractive entry prices as key tailwinds for investments. Almost nine out of ten investors (89 percent) expect their buying activities to increase or remain stable in 2026, while 83 percent expect sales activity to also increase or remain at current levels.
Southern Europe in the focus of cross-border investors
Southern Europe is proving to be an important beneficiary of the renewed increase in cross-border interest. Spain ranks first among the countries that are expected to generate the strongest total returns on the real estate market in 2026. This reflects robust macroeconomic conditions as well as strong demand for living properties in cities such as Madrid and Barcelona. The United Kingdom follows in second place, while Poland maintains its position as the third most important investment destination. Italy also climbed in the ranking, reaching fourth place.
Germany remains a stable target market
Germany also remains an important target market for real estate investors in Europe. Although the German market is not one of the top destinations with the highest expected total returns in 2026, according to the study, domestic demand remains stable and interest in high-quality assets remains high. At the same time, investors see Germany as being more affected by economic risks than other markets – especially in view of concerns about an economic slowdown.
Berlin also remains one of the most important European investment locations and continues to be represented in the top 10 most attractive cities for cross-border real estate investments. According to CBRE, the main drivers for this are ongoing population growth and structural supply bottlenecks in the housing market – factors that support residential investments in Germany in particular in the long term.
London once again leads the way in European investment cities
London remains the most attractive European city for cross-border real estate investment. Madrid and Barcelona are prominently represented in the top 5 alongside Warsaw and Milan. This highlights the growing demand from investors for markets with high liquidity, long-term resilience and additional value appreciation potential.
Value-add and core-plus dominate strategies
Investors continue to favor value-add and core-plus strategies, supported by stabilizing prices and opportunities to improve earnings and sustainability performance. While interest in traditional core strategies with stable cash flow has increased slightly year-on-year – especially among institutional investors – investment and asset managers continue to focus more on riskier strategies.
Sustainability as a central factor in the investment decision
Sustainability continues to play a central role in investment decisions. A clear majority of investors see ESG initiatives as a source of value creation, with the modernization and energy renovation of existing properties (retrofit) considered the preferred way to improve portfolio performance. Sustainability criteria are increasingly directly reflected in the pricing of real estate and in the selection of investment properties.
