Most major European metro areas also face housing shortages, see exhibit below. In the aggregate, these cities need a net three million housing units. In fact, in country markets where we found national oversupply, namely France and Italy, the larger cities of Paris and Milan were actually undersupplied.

There are also examples that go the other way: while our analysis found an ample shortfall in the U.K., Birmingham looked to be essentially in balance as of the date of the analysis in the below exhibit. While rent control may make acquisitions less attractive in some European markets, typically building new product allows developers more leeway in setting rents at current market levels. The opportunity to acquire is still compelling in less-regulated markets, like the U.K., or in cases where the cost basis mitigates the impact of rent controls.

European Housing Oversupply / (Shortfall) as a Percentage of Current Housing Stock

Sources: Eurostat, Green Street Advisors, and Hines Research. As of 4Q 2024.