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Housing in Berlin
Two recent investor surveys landed on REFIRE's desk within weeks of each other, prompting us to look up an earlier study of DACH family offices. They point to a property market in which investors are becoming considerably clearer about what they want to own, even as confidence in the market itself deteriorates. While the surveys disagree over how much property different investors want, they are much more consistent about what they increasingly expect their investments to provide: resilience, control and dependable income.
Patrizia's sixth global investor survey provides the clearest evidence of the change. Among 104 institutional investors representing almost €1 trillion of capital, expectations for property have deteriorated sharply within a year. The proportion expecting transaction activity to increase has fallen from 69% to 30%, while 47% anticipate declining valuations, more than double last year's 22%. Some 70% now expect financing costs to rise, compared with 37% previously.
Yet that caution is not producing a wholesale retreat from real estate. Instead, investors are concentrating more heavily on its defensive end. Core and Core+ strategies are favoured by 68%, up from around 60%, while residential has strengthened its position as the preferred sector. Traditional residential is the principal expansion target for 54%, with another 23% favouring specialised "modern living" formats such as student, senior and affordable housing. Offices attract just 6%, hotels 2% and retail none at all.
"For years, the fundamentals in many European property markets have been stronger than market sentiment," says Jochen Reith, Patrizia's head of capital markets DACH. The survey rather bears him out. Investors remain nervous about valuations, financing and liquidity while simultaneously expressing considerable appetite for property backed by structural demand.
Infrastructure makes the defensive instinct even clearer. Some 45% of Patrizia's respondents intend to increase their allocation over the next five years, ten percentage points more than last year, and 73% expect transaction activity to increase. Energy transition leads the sector preferences at 41%, while social infrastructure has risen particularly sharply, from 2% to 17%.
"The energy transition is increasingly being viewed through the prism of resilience and security of supply," says Patrizia's Janin Söder. That language is instructive. Investors aren't simply searching for the asset class offering the greatest prospective return. Security of income, essential demand and resilience against political and economic disruption are increasingly part of the attraction.
Family offices muddy the picture
Geopolitics reinforces the trend. Roland Berger's latest survey of 88 family-office executives and associated experts found 88% regarding geopolitical upheaval as a significant or very significant challenge, up from 65% previously and now ahead of interest-rate uncertainty. Patrizia's institutional respondents show a geographic response too: 24% intend to increase their allocation to Europe over the next three years and only 4% to reduce it. In the US, 33% expect to reduce exposure and just 3% to increase it.
The family-office evidence is less tidy — and therefore perhaps more useful. Roland Berger finds real estate held by 97% of respondents, making it their most widespread asset class, but it is also the asset class attracting the second-largest number of intentions to reduce exposure. Private-equity funds show much stronger momentum, with 55% planning increases, while 50% intend to expand direct private-equity investments.
An earlier Kingstone survey appears at first sight to point in the opposite direction. Its much smaller sample of 32 DACH family offices, surveyed in August and September 2025, had an extraordinarily high average 56.5% allocation to property. Almost 60% intended to increase their property holdings over the following 12 months and just under 16% expected to reduce them.
The two surveys should not be forced into agreement. They cover different samples at different times and ask different questions. Kingstone's respondents were already exceptionally property-heavy. But the detail of where they wanted to invest is revealing: 60% favoured existing German residential and 50% new-build housing, while 81.4% of their existing property exposure was held directly. Location and preservation of wealth mattered more to respondents than maximising current returns.
Rather than showing family offices collectively marching towards or away from property, the surveys suggest considerable selectivity within an investor group that prizes control and long-term capital preservation.
Intention is not investment
That distinction matters because none of these surveys measures capital actually deployed. An institution telling Patrizia that living is its preferred area for expansion over the next five years is not promising to buy an apartment portfolio next month. A family office intending to increase its property allocation can wait until an asset is available at a price it considers attractive.
Indeed, one of the more striking messages in the data is that investment conviction and market confidence can move in different directions. Patrizia's investors have become dramatically less optimistic about transactions, financing and valuations at precisely the moment residential is strengthening its grip on their sector preferences.
That helps explain how strong stated demand for living assets can coexist with a transaction market that remains thin. Investors may increasingly know what they want without yet accepting what sellers want for it.
REFIRE: Taken together, the surveys don't describe a broad return of risk appetite to European real estate. They describe capital becoming more discriminating. Residential, infrastructure, Core/Core+ strategies and direct ownership appeal for somewhat different reasons, but resilience, dependable demand and greater control run through them.
For the transaction market, that leaves an important qualification hanging over all those percentages describing what investors "plan" to buy. Investment intention creates potential demand, not transactions. The encouraging part is that a substantial pool of capital still wants real assets, and housing in particular. The unresolved question is what has to happen to pricing before that conviction becomes execution.