Real estate market to make a strong comeback in 2026

The real estate market is expected to make a strong comeback in 2026 after a few challenging years, according to Nuveen’s 2026 Real Estate Outlook.

Real estate - Nuveen

Property values are stabilising, and positive returns are anticipated. This makes 2026 a good year for real estate investment, especially with limited new construction, meaning less competition for existing properties.
While global events might cause some short-term ups and downs, the long-term trends supporting real estate investments remain strong. The market began to recover in 2025, and this momentum is set to continue. Although pricing and transactions are still below pre-downturn levels, they are expected to normalise further in 2026.
High costs for materials, labour, and financing have slowed down new construction. This means less new competition for existing properties, which should boost occupancy and rent growth.
The value correction between 2022 and 2024 has reduced some of the risk in real estate, making it an attractive option for investors looking to reallocate.
Investments in properties driven by essential demographic needs are particularly recommended.
Europe offers attractive opportunities due to recent price adjustments. While offices have faced challenges, they show signs of stabilisation. Industrial and logistics properties remain strong, driven by e-commerce and supply chain changes. High street retail is recovering in prime locations.
High investment and strong performance mark Europe's residential sector. Housing prices outpace incomes, fuelling rental demand. Limited new supply continues to support rent increases, creating opportunities for "build-to-rent" strategies.
Changes in international student policies in places like Canada and the U.S. have redirected many students to Europe. Countries like Germany, Italy, and France are seeing significant increases in international enrolment, creating strong demand for PBSA.
European retail parks, with their diverse tenant mixes (groceries, home goods, essential services), are showing strong income returns.
The re-emergence of trade barriers is driving a shift towards localised production in North America and Europe. As large companies set up domestic facilities, their suppliers follow suit, boosting demand for specialised industrial buildings. While established global trade hubs might face challenges, regions like Central Germany, Northern Italy, and the UK Midlands are benefiting from these changes.