EMEA Living Investment Reaches Highest Quarterly Volume Since 2022

Overview

Investment in living properties across Europe, the Middle East and Africa rose 49% year-on-year in the second quarter of 2026 to €17.4 billion, the highest quarterly total since 2022, according to JLL's EMEA Living Market Dynamics report published on 31 July 2026.

Key Data

• H1 2026 living investment reached €31.2 billion, up 10% year-on-year and 16% above the 2021–2025 five-year average for the first half.
• Average transaction size increased to €72 million from €39 million, while the number of deals fell 19%.
• Transactions above €100 million accounted for 68% of volumes, with combined volumes in this segment rising 103% year-on-year; smaller deals fell 8%.
• Multifamily investment rose 83% year-on-year, supported by platform deals exceeding €1 billion in Sweden, the UK, and Spain.
• Affordable housing saw the second-highest growth, primarily due to Spanish market activity.

Market Dynamics

JLL linked the surge to consolidation among institutional investors and continued demand for residential income-producing assets. The report also noted affordability shifts: average city residential sales price growth slowed to 3.1% in Q2, below rental growth of 3.4%, while inflation in tracked markets stood at 2.6%. In two-thirds of key European cities, renting is now more affordable than buying.

Construction Costs and Supply

Construction cost growth rose to 3.7% in Q2, above inflation, reflecting global supply chain disruptions from the Middle East conflict and shipping delays. Although building permits increased 7.7% in Q1, higher costs are expected to constrain new supply, potentially reinforcing the supply-demand imbalance.

International and Policy Implications

The investment pattern highlights the continued attractiveness of residential real estate for institutional capital across EMEA. Spain's affordable housing growth aligns with national policy efforts to expand the sector. Meanwhile, the relative affordability of renting could influence urban housing policy and household choices.

Outlook

JLL expects strong tenant demand and supply shortages to sustain investor interest in living assets. However, construction cost inflation and financing conditions may temper the pace of new supply, especially in markets with affordability pressures.

Key Takeaways

• EMEA living investment posted its strongest quarter since 2022, driven by large multifamily portfolio deals.
• H1 2026 volumes exceeded the five-year average by 16%.
• Large-scale transactions dominate, while smaller deals decline.
• Rental growth outpacing sales price growth supports demand for rental housing.
• Construction costs could limit new supply, keeping pressure on rents.

Sources

• JLL. "EMEA Living Market Dynamics Q2 2026." link