The European real estate sector is being buffeted by an economic storm triggered by the rapid rise in interest rates. Despite the economic doom and gloom, this also presents investors with opportunities, if they know where to look.

Europe’s macroeconomic outlook changed sharply in the second half of 2022 due to a combination of economic headwinds. These include rising energy and food prices triggered by the war in the Ukraine, disrupted supply chains, rapid interest rate rises as central banks attempted to tackle inflation and, more recently, market instability created by concerns over the strength of the banking system following the collapse of Silicon Valley Bank. All this has hit consumer disposable income. Consequently, in 2023, GDP growth for most European countries is expected to be sluggish and in some cases, nations will suffer minor recessions. Germany, for instance, entered a technical recession in the first quarter of 2023.

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