Real Estate And Retail Sectors Face Dramatic Shifts In 2026

Across Europe and North America, the real estate and retail sectors are experiencing a whirlwind of changes as 2026 gets underway. From Hungary’s surging hospitality industry to the United Kingdom’s cautiously recovering housing market, and from Paris’s landmark retail property deal to Amazon’s dramatic retreat from brick-and-mortar grocery stores, the landscape is shifting beneath the feet of investors, homeowners, and consumers alike.

In Hungary, hoteliers are breathing a sigh of relief as the industry enjoys a much-needed boost. According to CoStar’s news publications, the country’s hotel sector in 2025 saw a positive shift, propelled by Budapest’s rising popularity, relatively low costs, and targeted marketing campaigns aimed at drawing in non-European Union visitors. While these efforts have certainly paid off—Budapest now sits high on the list of must-visit European capitals—analysts caution that sustaining this growth outside the capital will require a delicate balance between keeping prices attractive and managing rising operational costs. Currency fluctuations and uneven performance across regions are still holding the sector back from a full post-pandemic recovery, but the mood is optimistic. The hope is that the influx of diverse visitors will lay the groundwork for broader prosperity in Hungary’s hospitality industry.

Meanwhile, the United Kingdom’s retail and housing sectors are each at pivotal moments. The fashion accessories retailer Claire’s, based in the United States, has entered financial administration in the UK for the second time in just six months, as reported by CoStar. This move, akin to the American bankruptcy process, comes amid mounting regional pressures, including recent shifts in tax policy. Landlords are now seeking to reclaim many of Claire’s approximately 150 stores across the UK and Ireland. Kroll, the business consulting firm, has been appointed to oversee the administration process, with the aim of finding a viable path forward for the beleaguered retailer. Claire’s first entered administration in August, following its parent company’s Chapter 11 bankruptcy filing in the United States. Since then, the company has announced plans to sell most of its North American business to private equity firm Ames Watson, but the fate of its UK and Irish operations remains uncertain.

On a more positive note, Britain’s housing market appears to be regaining momentum after a sluggish end to 2025. According to Reuters, property website Zoopla reported that buyer demand in early 2026 has rebounded to levels similar to early 2024, though still about 9% below the frenzied pace seen at the start of 2025, when buyers rushed to complete transactions before a temporary tax break expired. Richard Donnell, Zoopla’s Executive Director, noted, "After a weak end to 2025, home buyer confidence is returning as mortgage rates ease and those who delayed decisions last year return to the market." Mortgage interest rates for five-year fixed loans at 75% loan to value have dropped to their lowest since 2022, making homeownership more accessible for many. House prices have edged up by an average of 1.2% over the past year, with the largest gains seen in more affordable regions. Other indicators, such as Rightmove’s record rise in asking prices during the holiday period and improving expectations from the Royal Institution of Chartered Surveyors, further support the view that the market is on the mend. Stronger-than-anticipated economic data, including robust January purchasing managers’ figures and December retail sales, have also raised hopes for faster economic growth in early 2026.

Turning to continental Europe, Paris has witnessed a landmark real estate transaction. Canadian investment powerhouse Brookfield Asset Management has finalized the purchase of the iconic BHV building from French retail group Galeries Lafayette for around €300 million, as detailed by CoStar. This deal brings to a close a three-year saga over the future of the historic property, which sits in the heart of Paris and houses the renowned BHV department store. The business itself was acquired more than two years ago by investment group SGM. In a statement, Galeries Lafayette confirmed that Brookfield and SGM plan to continue operating the BHV store, with further development on the horizon. The sale underscores Paris’s enduring appeal to global investors and signals confidence in the city’s retail sector, even as other parts of the industry face headwinds.

Germany, however, is grappling with a different set of challenges. Rising insurance premiums, driven by increasingly frequent and severe weather events linked to climate change, have become the most significant factor affecting property operating costs and real estate values, according to a joint study by brokerage JLL and insurance provider Munich RE. The report, cited by CoStar, highlights that cities such as Frankfurt, Berlin, and Munich are particularly vulnerable. As insurance costs skyrocket, property values are taking a hit, and analysts warn that this trend could accelerate if extreme weather events continue to multiply. The ripple effects are being felt across Europe, with property owners and investors now forced to factor in climate risk as a central element of their financial planning.

In Canada, real estate professionals are watching interest rates closely, hoping for a period of stability. The Bank of Canada’s decision to hold its policy interest rate steady at 2.25% comes as the economy adjusts to slower growth and persistent trade uncertainties. The central bank, in a statement quoted by CoStar, explained that "uncertainty is heightened, and we are monitoring risks closely." This pause in rate hikes is a welcome relief for investors, particularly in Toronto and Vancouver, where new condo sales have dropped sharply from their pandemic-era peaks. As unsold inventory mounts, developers have responded by slowing or halting new projects, citing high financing costs and cooling demand for pre-construction units. The hope is that stable borrowing costs will help the market find its footing as broader economic conditions evolve.

Across the Atlantic, Amazon is making headlines for a very different reason. The e-commerce titan announced plans to close all of its approximately 70 Amazon-branded grocery stores, including 57 Amazon Fresh supermarkets and 15 Amazon Go convenience shops, according to CoStar’s reporting. The company admitted it has not found the "right economic model" for large-scale expansion in the grocery sector, marking yet another retreat from brick-and-mortar retail after previous closures of Amazon 4-star, Amazon Pop Up, and Amazon Books stores in both the United States and United Kingdom. Some of the shuttered locations will be converted to the Whole Foods Market brand, but the move signals a strategic pivot as Amazon reassesses its approach to physical retail.

All told, the first weeks of 2026 have delivered a flurry of developments across the real estate and retail landscapes in Europe and North America. From Budapest’s bustling hotels to Paris’s high-stakes property deals, from the UK’s housing market revival to Amazon’s latest shakeup, these stories reflect the evolving challenges—and opportunities—facing industries at the heart of everyday life.