Sunny growth rates across the Mediterranean

Southern Europe remained a bright spot, supported by resilient demand, lifestyle appeal and constrained supply. Lisbon led the region with capital value growth of 3.3% and rental growth of 7.6%, underlining continued resilience despite a more restrictive interest rate environment. Limited stock is supporting rents while also constraining price appreciation.

Spain's major cities recorded steady gains, with capital values up 2.4% in Madrid and 1.5% in Barcelona, and rents rising 2.1% and 2.0%, respectively. In Athens, capital values increased 1.2%, though rental growth eased to 0.9% as new prime supply entered the market. Athens, nevertheless, continues to offer some of the Mediterranean's most attractive returns, with prime yields of 4.0%.

Italy rounded out a broadly positive regional picture, with Milan and Rome recording capital value growth of 1.5% and 0.2% and rental growth of 2.0% and 1.8%, respectively. Strong lifestyle credentials and improving connectivity continue to underpin demand across the region.

Strength, stability and adjustment across Europe

Northern and Western Europe delivered a more mixed performance. Paris remained relatively resilient, with capital values up 0.7% and rents up 3.1%, supported by demand in the luxury and ultra-luxury segments. Transactions above €10 million remained active, and the ultra-prime market achieved new price-per-square-metre records in early 2026.

Amsterdam recorded steady growth, with both capital values and rents increasing 1.6%. However, changes to local regulations regarding expatriates may temper future demand from internationally mobile high net worth buyers, such as the Box 3 rule, while additional supply is expected to ease rental pressures.

In London, capital values fell by -1.9% over the first six months, but rents increased by 0.8%. Although the pace of decline has slowed, prime central London's core neighbourhoods remain -24.5% below their 2014 peak, underlining the market's prolonged adjustment.

Berlin was among the weakest-performing markets in the index, with capital values falling by -4.4% and rents declining by -6.2%, reflecting economic challenges and a slowing development pipeline. Geneva, however, was a regional outperformer with 3.1% capital value growth, but rental growth remained modest at 0.9%.

Cape Town climbs, while Dubai cools

Prime residential markets in the Middle East and Africa moved in opposite directions. Cape Town was one of the index's strongest performers, with capital values up 4.7% and rents up 7.9%, as demand consistently outpaced limited high-quality prime stock. This imbalance is forecast to tighten for the rest of 2026 as the pricing gap between prime and non-prime areas continues to narrow.

Dubai, by contrast, was one of the weakest markets in the index as the market absorbs the shocks from geopolitical events in the region and supply continues to outpace demand, with capital values down -4.5% over six months and rents down -6.7%; however, best-in-class properties are expected to remain relatively resilient even as broader rental values trend downward.