ERA revises rental growth rates for 2014

The European Rental Association (ERA) has updated its rental growth estimates for this year, with improved outlooks for the UK, Germany, Denmark and Spain contrasting with downgrades for Italy, Norway and Poland.

Overall, the association is expecting Europe’s rental market to grow by 2.8% this year – following 0.7% growth last year – with growth expected to increase to 3.6% in 2015. The 2014 and 2015 forecasts have been upgraded from 2.5% and 3.3%, respectively.

The revised figures were presented to the ERA convention in Amsterdam by the chairman of the statistics committee, Graham Arundell, who is managing director of Hire Association Europe, the UK trade association.

Mr Arundell said the forecast for 2014, taking the total European market value to just over €23 billion, was encouraging, although rental volumes this year will still be below the peak of 2008. He said 2015 would see volumes exceed the previous peak.

The main gainers in the revised outlooks are the UK, where 2014 growth has been increased from 4.8% to 5.3%, reflecting the improving economic conditions in the country, and Germany, where growth this year is expected to increase to 4.6% compared to the previous forecast of 4.0%. The ERA still expects Spain’s rental industry to contract this year, but by -4.5% rather than the -6.5% forecast last year.

On the other hand, prospects for Italy have worsened since the first forecast for 2014 was made last year, with the ERA now expecting the rental market to grow by just 0.8% in 2014 compared to the earlier 2.2% estimate. Norway’s growth has been downgraded from 3.7% to 2.7% - still relatively healthy – and Poland’s from 3.6% to 2.9%.