A new report by CBRE Research on Capital Flows into the European Residential Sector has found that despite growing challenges, investment activity in the Residential sector in Europe held up well in H1 2022.

After an exceptional performance in 2021 with a record-high investment volume of €109bn, investment activity slowed in the first half of 2022 but remained robust. Totalling over €32bn, the total residential investment volume of H1 2022 was slightly down from the previous year (-7%) but exceeded the 2017-2021 H1 average by 8%.

The Residential sector has matured rapidly and has now established itself as the second largest asset class in Europe in terms of investment volume. The H1 investment volume has more than tripled from almost €10bn in 2012 to €32bn in 2022.

Madrid and Berlin have attracted most of the international capital in the first half of 2022, with London and Barcelona coming in at a shared third place. The top 10 cities are comprised of locations with a rapidly emerging investment market such as the Spanish cities, London and Dublin.

In terms of cross-border capital inflows, established markets with a long history of residential investments such as Frankfurt and Hamburg have seen somewhat of a slowdown in the rankings, while Copenhagen remains highly liquid in terms of cross-border investment volumes, said CBRE.