The Direct Real Estate Activities industry have come up against numerous headwinds in recent years, ranging from the COVID-19 outbreak in 2020 to the rising base rate environment in the years since, which have inflated borrowing costs for potential buyers. This is a sharp contrast to the ultra-low interest environment seen over the decade following the 2008 financial crisis. Revenue is forecast to fall at a compound annual rate of 4.0% over the five years through 2024 to €588.2 billion, including an anticipated drop of 3.1% in 2024. However, profitability remains strong, with the average industry profit margin standing at an estimated 41.6% in 2024. Central banks across Europe adopted aggressive monetary policy in the two years through 2023 in an effort to curb spiralling inflation. This ratcheted up borrowing costs and hit the real estate sector. In the residential property market, mortgage rates picked up and hit housing transaction levels. However, the level of mortgage rate hikes has varied across Europe, with the UK experiencing the largest hike, meaning the dent to UK real estate demand was more pronounced. Commercial real estate has also struggled due to inflationary pressures, supply chain disruptions and rising rates. Alongside this, the market’s stock of office space isn’t able to satisfy business demand, with companies placing a greater emphasis on high-quality space and environmental impact – properties in many areas aren’t suitable due to their lack of green credentials. Revenue is slated to inch upwards at a compound annual rate of 3.1% over the five years through 2029 to €651.3 billion. Although economic conditions are set to improve in the short term, elevated mortgage rates will continue to weigh on demand for residential property. However, the warehousing market is positioned for solid growth, benefitting from the rise in e-commerce. This is particularly relevant to Poland, which leads the EU warehouse market.

Companies operating in the third-party real estate industry have had to navigate numerous economic headwinds in recent years, ranging from rising interest rates, spiralling inflation and muted economic growth. Revenue is projected to sink at a compound annual rate of 3.7% over the five years through 2024, including an estimated slump of 2.1% in 2024 to €196.2 billion, while the average industry profit margin is forecast to reach 34.6%. Amid spiralling inflation, central banks across Europe ratcheted up interest rates, resulting in borrowing costs skyrocketing in the two years through 2023. In residential markets, elevated mortgage rates combined with tightening credit conditions eventually ate into demand, inciting a drop in house prices. Rental markets performed well when house prices were elevated, being the cheaper alternative for cash-strapped buyers. However, even lessors felt the pinch of rising mortgage rates, forcing them to hoist rent to cover costs and pricing out potential buyers. This led to a slowdown in rental markets in 2023, weighing on revenue growth. Revenue is forecast to swell at a compound annual rate of 4% over the five years through 2029 to €238.7 billion. Following a correction during 2024, housing prices are set to being recovering in 2025 as fixed-rate mortgages begin to drop and economic uncertainty subsides, aiding revenue growth in the short term. Over the coming years, Proptech, which has been heavily invested in, will force estate agents to adapt, shaking up the traditional real estate industry. A notable application of Proptech is the use of AI and data analytics to predict a home’s future value.

Key information about House Prices Growth

• Cyprus house prices grew 6.5% YoY in Sep 2024, following an increase of 8.0% YoY in the previous quarter.
• YoY growth data is updated quarterly, available from Mar 2007 to Sep 2024, with an average growth rate of 0.9%.
• House price data reached an all-time high of 25.3% in Sep 2007 and a record low of -9.4% in Mar 2014.

Building contractors and developers depend on various socio-economic factors, including property values, underlying sentiment in the housing market, the degree of optimism among downstream businesses and credit conditions. All of these drivers typically track in line with economic sentiment, with recent economic shocks spurring a difficult period for building contractors and developers. Nonetheless, the enduring need for building services, particularly to tackle housing shortages across the continent, ensures a strong foundation of work. Revenue is forecast to decline at a compound annual rate of 2.9% to €1.1 trillion over the five years through 2024. Building construction output recorded strong and consistent growth across Europe in the years leading up to the pandemic, buoyed by rising house prices and a return to economic stability as the effects of the financial crisis faded. Operational and supply chain disruption caused by the pandemic reversed the fortunes of building contractors and developers in 2020, as on-site activity tumbled and downstream clients either cancelled, froze or scaled back investment plans. Aided by the release of pent-up demand and supportive government policy, building construction output rebounded in 2021. Excess demand for key raw materials led to extended lead times during this period, while input costs recorded a further surge as a result of the effects of rapidly climbing energy prices following Russia’s invasion of Ukraine. Soaring costs and the impact of the economic slowdown on both the housing market and investor sentiment have led to a renewed slowdown in building construction activity across the continent. Revenue is forecast to decline by 1.5% in 2024. Revenue is forecast to increase at a compound annual rate of 4.9% to €1.5 trillion over the five years through 2029. Activity is set to remain sluggish in the medium term, as weak economic growth continues to constrain investor sentiment and high borrowing costs hold back the housing market. Contractors and developers will increasingly rely on public sector support, including measures to boost the supply of new housing as countries seek to tackle severe housing shortages.

The industry includes the renting and leasing of goods like automobiles, computers, consumer goods and industrial machinery and equipment to customers in return for a lease or rent payment. Services are broken down into the renting of motor vehicles, the renting of recreational and sports equipment and household equipment, the leasing of other machinery and equipment for business operations and the leasing of intellectual property products.

The size of the Greece Property And Casualty Insurance Market was valued at USD 7.60 Million in 2023 and is projected to reach USD 9.78 Million by 2032, with an expected CAGR of 3.67% during the forecast period. The Greece property and casualty insurance industry plays a crucial role in the country's financial landscape, providing coverage against a range of risks associated with property damage and liability. This sector encompasses various types of insurance products, including homeowners insurance, automobile insurance, commercial property insurance, and liability coverage. With a growing economy and increased focus on risk management, the industry has evolved to meet the diverse needs of both individuals and businesses. In recent years, the demand for property and casualty insurance in Greece has been driven by factors such as rising property values, increased vehicle ownership, and a heightened awareness of the importance of financial protection. The industry is characterized by a mix of local and international insurers, which fosters competition and innovation in product offerings. Regulatory frameworks established by the Bank of Greece and the European Insurance and Occupational Pensions Authority (EIOPA) ensure that insurers maintain adequate reserves and operate transparently, enhancing consumer confidence. Recent developments include: December 2022: European Reliance and Allianz Greece announced the formation of an Executive Committee (ExCom) to oversee their joint expansion journey and facilitate the effective integration of the two companies. The composition of the ExCom members has been carefully chosen with the primary goal of ensuring a seamless integration process.., February 2022: The European Commission unconditionally cleared the acquisition of Ethniki Hellenic General Insurance Company S.A. of Greece by CVC Capital Partners SICAV FIS S.A. of Luxemburg. Ethniki offers life and non-life insurance services, insurance distribution, and reinsurance services in Cyprus, Greece, and Romania. CVC and its subsidiaries manage investment funds and platforms and control many companies, including the Hellenic Healthcare Group, which offers private hospital services in Cyprus and Greece.. Key drivers for this market are: Digitalization is Driving the Market. Potential restraints include: Economic Disparities are Restraining the Market. Notable trends are: Technological Advancements are Driving the Market.

Over the five years through 2024, IP leasing revenue is projected to fall at a compound annual rate of 4.5% to €29.7 billion. IP leasing demand has benefitted from increasing technological complexity in vehicles, software and pharmaceuticals. Tax incentives have also driven up IP leasing by reducing the R&D costs, thereby cutting the prices charged for leasing IP. Demand from the radio frequency spectrum leasing market has surged thanks to the rollout of 5G across the majority of European geographies. However, IP leasing demand slumped at the height of the COVID-19 pandemic, which caused business confidence and research and development spending to tumble. Revenue has since bounced back, though, and is slated to swell by 0.2% in 2024 as European businesses continue to realise the benefits of leasing IP rather than developing it themselves. Revenue is forecast to surge at a compound annual rate of 4.8% over the five years through 2029, reaching €37.7 billion. Rising research and development expenditure across Europe will boost the pool of registered designs, patents and trademarks available in the market, fuelling revenue growth. European business and consumer sentiment is projected to strengthen moving forward, supporting demand for IP leasing. The ongoing trend of technological manufacturers across Europe becoming fabless will also drive up the need for leasing IP.

Since the COVID-19 pandemic, weak economic conditions have deterred new investment into the construction sector as businesses have sought to preserve cash amid an inflationary economic environment, leading to the postponement and even cancellation of large construction projects. This has restricted the number of opportunities in the new building construction market. However, consumers have increased spending on repair, maintenance and renovation activities, supporting other revenue opportunities for building completion and finishing contractors, supporting an uptick in revenue. Revenue is forecast to grow at a compound annual rate of 3.1% over the five years through 2024 to reach €328 billion. Significant inflationary pressures have led to retaliatory hikes to the central banks’ base interest rate, increasing the cost of borrowing. This has limited the number of new construction projects and also caused the housing market to cool as would-be home buyers are priced out of mortgages. In turn, property developers have reduced output, and consumers have managed spending budgets with greater care, increasing the threat from DIY. As such, revenue is forecast to sink by a further 2.3% in 2024 to €328 billion. Over the five years through 2029, revenue is projected to climb at a compound annual rate of 4% to reach €399.3 billion, supported by recovering economic conditions and renewed investment into the construction sector. As sentiment levels return to growth and the inflation rate eases, businesses and consumers will be more likely to undertake larger projects, supporting demand for building completion and finishing services.

The European legal services industry is in a phase of consolidation, signified by a surge in both intranational and international M&A activity. Challenging economic conditions have hindered demand for legal services, particularly from the corporate market. Demand for countercyclical services has limited a slump in revenue, with law firms advising on restructuring and insolvency issues. Industry revenue is projected to contract at a compound annual rate of 4.1% to €208.3 billion over the five years through 2024. The corporate law service industry has been adversely affected by fluctuating economic conditions caused by the COVID-19 pandemic and a rising inflationary environment. Economic uncertainty led to a sharp drop in M&A activity and IPOs, weakening demand for legal services in 2020. However, there was a robust recovery in 2021, with M&A activity in Europe rebounding to a record high. The following year saw a dip again due to soaring inflation and geopolitical tension. Law firms face increasing threats from the expanding in-house legal departments in large companies. Despite these threats, the industry seems resistant to price pressures as companies continue to seek specialised legal services. Revenue is projected to dip at by 2.8% over 2024. Revenue is forecast to swell at a compound annual rate of 3.3% to €245.3 billion over the five years through 2029. An improving economic climate will fuel business activity, encouraging greater dealmaking activity and business spending to the benefit of law firms. Technological advancements offer further opportunities for legal services as they enable increased efficiency by automating repetitive tasks. However, competition will continue to intensify, providing some threats to legal services providers.

Revenue is forecast to contract at a compound annual rate of 2.8% over the five years through 2024 to €239.9 billion. Since the inception of the COVID-19 pandemic, weak economic conditions have restricted the number of new projects coming to fruition, hindering the number of big-ticket tender opportunities available for electricians to bid for and obtain. Businesses have remained cautious amid an uncertain economic outlook, opting to preserve cash and postpone or cancel significant construction projects. Over the two years through 2024, inflationary pressures have persisted and retaliatory increases to the base rate have ballooned the cost of borrowing. Despite public funding and support for new residential properties, a cooling housing market has limited demand from property developers. Revenue is expected to dip by 2.5% in 2024. As inflationary pressures subside and business and consumer sentiment rebound, revenue prospects will grow and more large tender opportunities will come to fruition. Businesses will increase spending budgets in line with recovering economic conditions and recovering house prices will spur new opportunities in the residential market, contributing to a recovery in income. Revenue is forecast to expand at a compound annual rate of 3.3% over the five years through 2029 to €281.8 billion.

Plumbing, heating and air conditioning installation revenue is forecast to dip at a compound annual rate of 2.7% over the five years through 2024 to €219.1 billion. Weak economic conditions since the COVID-19 outbreak and restrictions at the height of the pandemic resulted in the cancellation and postponement of many projects, especially in the commercial market, as customers sought to conserve cash. Despite the easing of lockdown restrictions, significant inflationary pressures have continued to plague revenue opportunities, as retaliatory hikes to the base rate by central banks have caused the cost of borrowing to soar, restricting new investment into construction. In 2024, inflated interest rates are expected to continue to weigh on the housing market, contributing to weaker house prices and hindering demand from residential property developers. Nonetheless, demand from infrastructure construction and utility companies will remain resilient due to the essential nature of plumbing and HVAC systems. This will also keep demand for repair and maintenance services from the commercial market fairly strong, especially where these systems are business-critical. Still, revenue is forecast to decline by 3.8% in 2024. Over the five years through 2029, revenue is forecast to expand at a compound annual rate of 1.5% to €236.2 billion. Easing inflationary pressures will translate into recovering economic sentiment, supporting renewed demand from commercial and residential clients alike. Continue public investment into infrastructure projects and public buildings, like schools and hospitals, will also support demand for plumbing and HVAC installation services. The provision of repair and maintenance services is also slated to remain healthy.

Over the five years through 2024, the insurance industry’s revenue is forecast to edge downwards at a compound annual rate of 1.7%. Bulk annuities have boomed in popularity, fuelled by pension funds de-risking. Performance from the private client or the retail market is mixed and unequal across product segments, with life coverage facing the brunt of lacklustre growth in income as people consider where to save money. Despite the less-than-bright outlook, opportunities remain. Commercial and speciality lines have boomed thanks to digitisation and geopolitics. The frequency and severity of natural catastrophes intensify with climate change, and inflation only adds to the cost of payouts, depleting reserves and pushing up premiums. In 2024, revenue is expected to increase by 2% to €1.5 trillion and profit is anticipated to reach 5.4%%. Over the five years through 2029, revenue is forecast to grow at a compound annual rate of 5.3% to €1.9 trillion. Rising sales for speciality commercial lines like Natural Catastrophe, cyber and clean energy will drive growth. As weather events become more severe and frequent across Europe, premiums will continue to rise and NatCat coverages become a more attractive opportunity. Regulation will focus on societal outcomes, with the European Parliament following in similar footsteps to the UK, relaxing capital reserve requirements and countries introducing national guarantee schemes.

Hardware and home improvement stores’ revenue is forecast to rise at a compound annual rate of 1.4% over the five years through 2024 to reach €155.8 billion. Private spending on home renovation and maintenance, construction activity, environmental awareness and the number of households each play their part in determining sales. The EU and the UK enjoyed a housing market boom prior to 2023, when soaring mortgage rates deterred many from buying a new house. While demand for outfitting new houses is down, more Europeans are turning to repair, maintenance and renovation work on their existing properties, helping to raise sales of hardware and home improvement products. This trend accelerated during the COVID-19 pandemic, as people confined to their homes looked to refresh their surroundings and found themselves with more time to dedicate to DIY projects. Hardware and home improvement stores were deemed by many governments as essential businesses, allowing them to remain open during the lockdowns. In 2024, revenue growth is expected to be constrained by the cost-of-living crisis. Shoppers are increasingly price-sensitive and many are thinking twice before spending in response to intense inflationary pressures, cutting sales for many hardware and home improvement stores. Price inflation is expected to outweigh falling sales volumes, leading to revenue growth of 1% in 2024. Over the five years through 2029, hardware and home improvement stores’ revenue is slated to climb at a compound annual rate of 1.5% to reach €168 billion. Ever-growing levels of environmental awareness among Europeans will drive strong demand for sustainably sourced and energy-efficient products, like reclaimed wood and lithium-ion battery-powered hand tools. Competition from online-only retailers will continue to heat up, forcing hardware and home improvement stores to expand their in-store offerings to attract customers – augmented reality stations where shoppers can visualise their new products in their homes are one way retailers can try to do this.

Employment placement agencies in Europe’s revenue is anticipated to contract at a compound annual rate of 3.2% over the five years through 2024 to €47.8 billion. The COVID-19 outbreak tanked business confidence and expansion plans because of economic uncertainty after months of global lockdowns, forcing hiring freezes in a tricky time for employment agencies. 2022 marked a resurgence for agencies. According to Eurostat data, employment in the EU reached a record peak of 74.6% in 2022, with unemployment falling month-on-month to 5.9% in August 2023. Companies enjoyed a post-COVID-19 boom in hiring, as the economy reopened and company’s began to look to expand thanks to improved business confidence which kept employment agencies busy. The labour market has proved resilient against the economic background of rising interest rates and high inflation but remains tight with several unfilled vacancies. Vacancies remain well above pre-pandemic levels but have steadily dipped from the sharp rise post-COVID-19 as companies unfroze hiring decisions, indicating a skills mismatch between job seekers and roles that agencies are struggling to negotiate. Several countries attempt to address long-standing labour shortages to ameliorate professional mobility and offer training courses for in-demand skills through agencies. France, for example, is addressing youth unemployment through upskilling training programmes. Public sector hiring in Germany and Spain in health and education also pushes revenue growth for agencies compared to stunted private sector demand. Revenue is expected to slump by 1.3% in 2024 amid job cuts in the technology sector. Revenue is projected to swell at a compound annual rate of 4.3% over the five years through 2029 to reach €58.9 billion. Agencies will continue to target revenue growth by elevating their online presence, specialising their services towards more niche sectors and targeting executives and upper management positions. Technological developments remain a threat to recruiters, with HR AI systems like Paradox able to scan networking platforms such as LinkedIn for candidates. Companies’ in-house HR teams are expanding too. The sustainability sector looks to be a hot property job market to target, but potential shortages in both high and low-skilled occupations driven by employment growth in STEM professions and healthcare will create hurdles in the hiring process in other sectors.