Europe's real estate debt funding gap has shrunk by 42%, from $86bn (£56bn) to $50bn in the past six months as banks continue to deleverage and new lenders enter the market, according to the latest research from DTZ.
There may even be a lending surplus in UK, France, Germany and Sweden in 2013-14.
DTZ estimates that funds and insurers will provide $181bn of new lending capacity across Europe in 2013-15.
The emergence of new lenders will put pressure on loan pricing, and may push non-bank lenders to look at opportunities in non-core lending, according to DTZ's research team. The UK is expected to lead the way, with non-banks increasing their market share from 7% to 15%.
Hans Vrensen, global head of research at DTZ, said: "The speed and magnitude of the growth in non-bank lending has been surprisingly strong. As we more closely assess the impact across each market, we expect that the bigger, core lending markets are likely to benefit more in the short term from this trend. Surplus capacity in some of these core markets will likely take some time to be redirected or re-priced.