AEW has published its latest European research report, “European residential expected to remain resilient if prolonged Middle East conflict triggers downside scenario.”
“The European residential market is expected to remain resilient, despite the potential impact of a prolonged conflict in the Middle East leading to higher inflation and interest rate rises in 2026,” said Irène Fossé, executive director, research and strategy Europe at AEW. “Our previous downside scenario assumes a more damaging long-term trend than justified by on events to date. As a reference it showed a modest 80 bps p.a. impact on our previous base case returns. New residential supply remains limited across most European markets, although we anticipate a gradual increase in residential completions in 2026-28. In France, for example, more housing has been built in 2025 than in any other European country, despite a 17 percent year-on-year decline. Over the last 15 years, residential has doubled
