New tech can speed up Europe’s single-family rental sector.

As we end the last quarter of 2021, a second volatile year due to the pandemic, institutional investment in Europe’s residential sector is on the rise as landlords look to satisfy the demand for stable returns.

Single-family rental (SFR) is an untapped asset class, where units of rental property can be used to build highly diversified, low-risk portfolios. But in order to deliver this at speed and scale, harnessing data and technology isn’t just an idea, it’s a necessity.

According to the Organisation for Economic Co-operation and Development (OECD), Germany has the second highest rental rate of OECD nations, with 54.5% of its population renting their homes. The US, in comparison, has a rental rate of only 34.9% (OECD: Society at a Glance 2019), however, SFR as an asset class is already relatively established, with major landlords such as Blackstone, each owning tens of thousands of SFR units.

In August, The Daily Telegraph reported that housing affordability in the UK’s cities has reached a record low, with salaries failing to maintain the rapid double-digit property price growth over the past year. This was confirmed by a recent Halifax report, commenting that cities in the UK have experienced a meteoric 10.3% rise in house prices. By comparison, in the past 12-months, wages in UK cities only increased by 2.1%, highlighting the inaccessibility of homeownership in the residential sector.

Worsening house affordability is a similar story emerging across Europe and a cultural shift towards renting is inevitable. Consumers now choose to rent rather than buy, in order to retain flexibility of where they live and spend their money.

The residential market in Europe is now estimated at €40tn, offering a wealth of opportunity for those who can unlock it. IMMO Capital is the first SFR asset manager in Europe to develop an advanced AI-enabled platform to identify and assemble SFR rental portfolios at incredible speed and scale.