Low supply and high demand, the real estate market in Europe, specifically in Germany and the United Kingdom, has risen fast in recent years – Israeli investors are not despairing and are exploring new and less traditional alternatives after the Coronavirus, such as the life sciences industry and the hotel industry. Investors are picking up opportunities as Europe’s real estate market recovers along with the vaccines against the Coronavirus. Increases in residential real estate prices are not unique to Israel – this trend can be observed in other European countries, such as the United Kingdom and Germany. Increases can be attributed to one basic cause: low supply and high demand. Analyses conducted by the Nationwide Building Society in the United Kingdom found that the average price of a UK apartment increased by 0.7% from May to June and 13.4% annually – the fastest rate since 2004.
Housing prices in Germany increased by 50% in 2010-2020, and the annual demand for apartments is expected to reach 350 thousand while construction of about 300 thousand apartments is expected to start. The price increases attract institutional investors to the rental property market. This year, Harel entered the rental housing market in the United Kingdom for the first time and Clal Insurance entered the rental real estate market in the United Kingdom by investing in the LRC fund. Real estate in the life sciences sector – the construction of a complex including laboratories, offices, and other services for R&D companies in the field of pharmaceuticals or other medical products – has seen an upswing because of the Coronavirus, as investors realized the potential as well as the need for new medical developments, such as a vaccine for the virus. The sector of life sciences will account for about 2.4% of the British GDP by 2027. International investors who understand real estate, development, and procurement have an excellent opportunity here. Those who enter early will benefit from the opportunity created by the pandemic.