Key Facts:
- Central Banks Pivot: The U.S. Fed and Bank of Canada are poised to cut interest rates, aiming to revive housing demand amid cooling inflation realestatenews.com reuters.com. U.S. 30-year mortgage rates have dipped to ~6.25%, down from 6.6% a month ago realestatenews.com, offering slight relief to homebuyers.
- United States Housing Crunch: Average U.S. mortgage payments have nearly doubled from pre-pandemic levels, driving affordability to record lows reuters.com. Treasury Secretary Scott Bessent warned a national housing emergency may be declared as high rates and soaring rents fuel a “vicious” economic cycle reuters.com. The country faces a 4.7 million home shortfall reuters.com, with experts urging accelerated homebuilding to ease the crisis.
- China’s Property Slump Deepens: China’s new home prices fell 0.3% in August (month-on-month), extending a decline that began in mid-2023 reuters.com. Prices are down 2.5% year-on-year despite dozens of stimulus measures. Property investment plunged 12.9% in January–August reuters.com, prompting calls for stronger support. Analysts anticipate easing of homebuying curbs and a rate cut in the Loan Prime Rate on Sept 20 reuters.com to stabilize the sector.
- India Mixed Fortunes: India’s real estate saw robust commercial activity – BlackRock leased 143,000 sq ft in Bengaluru for ₹410 crore hindustantimes.com and Delhi’s office market is ending a decade-long lull with 5 million sq ft of new supply hindustantimes.com. Retail space is booming too, driven by the F&B sector hindustantimes.com. Yet policymakers remain wary: India’s Supreme Court blasted speculative investors as “slow poison” for housing, urging curbs on rampant speculation hindustantimes.com.
- Middle East Booms vs. Global Gloom: Dubai’s property market is defying global slowdowns – August home sales hit a record AED 42.4 billion (~$11.5B) across 17,879 transactions, up 17% in volume year-on-year gulfbusiness.com. Families are rushing from renting to owning; secondary-market sales jumped 22% in 2025’s first eight months gulfbusiness.com amid investor-friendly policies and 6–7% rental yields that far exceed London or New York gulfbusiness.com. In contrast, Europe’s commercial real estate remains in a funk: transaction volumes are stuck near decade lows as sellers resist price cuts and “zombie” assets (like aging offices) find few buyers reuters.com reuters.com.
- UK Housing Cooling: Britain’s house prices slipped 0.1% year-on-year in the latest survey – the first annual decline since early 2024 reuters.com – while rent growth (2.4% YoY) is the slowest in four years reuters.com. More rental supply and better first-time buyer mortgage access are easing pressure reuters.com. Uncertainty looms as rumors of new property taxes swirl ahead of November’s budget, dampening activity in high-end markets reuters.com. The Bank of England is expected to hold rates at 4.0% this week, with markets not pricing in a rate cut until spring 2026 reuters.com.
- EU Targets Housing Crisis: European Commission President Ursula von der Leyen declared housing “a social crisis” in her Sept 10 State of the Union, noting home prices are up 20% since 2015 while building permits plunged 20% housing.ec.europa.eu. She announced the EU’s first Affordable Housing Plan to overhaul rules – easing state-aid limits, speeding up construction permits, and regulating short-term rentals – and will convene an EU housing summit housing.ec.europa.eu housing.ec.europa.eu.
- Major Investment Moves: Brookfield Asset Management is in advanced talks to acquire Yes! Communities – one of America’s largest manufactured-home park operators – from Singapore’s GIC in a deal over $10 billion credaily.com. If finalized, it would be among the biggest real estate acquisitions since 2022 credaily.com, making Brookfield a dominant player in affordable housing. Industry analysts note that with housing supply tight, investors are chasing existing affordable assets, and manufactured home communities offer strong rent-growth potential credaily.com. In another cross-border play, Canada’s Ontario Teachers’ Pension Plan made its first U.S. industrial real estate investment, partnering on a 163,000 sq ft logistics facility in Houston credaily.com – signaling that demand for warehouses remains solid even as the sector’s pandemic-era boom cools.
- Tech & Regulation: A high-profile lawsuit against RealPage – accused of enabling landlord collusion via rent-setting algorithms – escalated as the company pushes back on DOJ charges and city bans. At least nine U.S. cities (including San Francisco and Philadelphia) have outlawed algorithmic rent tools, but RealPage insists its AI software only suggests (not sets) rents credaily.com credaily.com. The outcomes of these antitrust cases could reshape multifamily pricing tactics. Meanwhile, U.S. multifamily rents show a growing divide: top-tier apartments still see solid rent growth, but weaker job markets are softening demand for lower-tier rentals, highlighting a bifurcation in rental housing recovery.
North America: Easing Rates, Housing Headwinds & Big Deals
United States: Labor & Housing Headwinds, Policy Shifts
In the U.S., the real estate narrative is dominated by high borrowing costs and housing shortages – a one-two punch threatening the broader economy. The Federal Reserve is widely expected to cut interest rates by 0.25% on Sept 17 to counter a weakening labor market realestatenews.com. Unemployment has risen to its highest since 2021, and for the first time in four years there are more unemployed workers than job openings reuters.com – clear signs of cooling that give the Fed cover to ease policy. Markets even speculate about a larger 50 bp cut or multiple cuts in coming months realestatenews.com. Mortgage lenders have already priced in some relief: average 30-year fixed rates fell to 6.25% as of Sept 15, down from ~6.6% in mid-August realestatenews.com.
Fan-Yu Kuo, senior economist at NAHB, noted that lower rates could help “ease the affordability crisis” in housing and bring sidelined buyers back realestatenews.com. Early signs of this emerged as mortgage purchase applications jumped last week realestatenews.com. However, Ali Wolf, chief economist at Zonda, cautions that a faltering job market may initially dampen homebuyer demand, even if borrowing costs drop. Historically, she says, falling interest rates eventually outweigh job market headwinds, reviving home sales before the broader economy turns the corner realestatenews.com.
“High mortgage rates are seen as the biggest economic problem by one in three buyers,” observes Greg Schwartz, CEO of Tomo Mortgage, noting 75% of Americans now perceive today’s rates as “unusually high” (despite being below 50-year averages) realestatenews.com. This perception gap is chilling buyer confidence. Until it closes, Schwartz warns, demand will remain fragile realestatenews.com.
At the same time, the housing supply crunch in the U.S. is acute. Monthly payments have nearly doubled from pre-2020 levels for new buyers reuters.com, and rents are near record highs, straining budgets. The country faces a 4.7 million unit housing deficit, according to Zillow data reuters.com. Shelley Stewart III of McKinsey explains that a lack of affordable housing is “directly impacting the efficiency and flexibility of the labor market”, as workers can’t relocate for jobs reuters.com. Labor mobility in the U.S. has plunged to historic lows (under 9% annual move rate, vs ~20% in the 1960s–70s) reuters.com, partly because many homeowners are “locked in” to ultra-low pandemic-era mortgage rates and cannot move without forfeiting them reuters.com. This immobility is emerging “at exactly the wrong time”, just when employers in some regions can’t find workers and laid-off workers elsewhere can’t afford to move for new opportunities reuters.com.
Policymakers are grappling with how to break this vicious cycle. Treasury Secretary Scott Bessent recently signaled the government may soon declare a national housing emergency reuters.com – a dramatic step that underscores how housing unaffordability has become a top-tier economic issue. Such a declaration could pave the way for federal interventions. In the meantime, building more homes is the clearest solution: McKinsey estimates that closing the housing gap would create up to 1.7 million jobs and add nearly $2 trillion to U.S. GDP by 2035 reuters.com. But developers face high financing costs, labor shortages, and zoning hurdles. As Jamie McGeever of Reuters notes, no quick housing rescue is likely – the economy can’t count on a housing rebound to dodge a downturn in the short term reuters.com. Instead, hopes rest on the coming monetary easing and potentially new fiscal incentives or deregulation to provide some relief reuters.com.
Commercial Real Estate: U.S. commercial sectors present a mixed picture. Work-from-home trends continue to challenge office markets, but there are glimmers of stabilization. Tech-centric cities saw a hiring uptick in AI-related jobs, which is boosting office demand in hubs like San Francisco, Seattle, and New York, according to industry reports credaily.com. Even so, offices in secondary locations and older buildings remain distressed, with capital values down and cap rates for lower-tier offices only just starting to stabilize credaily.com after a deep freeze in investment. In contrast, the industrial/logistics sector, which boomed during the e-commerce surge, remains relatively resilient. Investors are still betting on warehouses: for example, Ontario Teachers’ Pension Plan partnered on a 163,000 sq ft Houston industrial deal credaily.com as it forays into U.S. logistics assets. Warehouse vacancy rates have inched up from 2022 lows, but strong demand for modern distribution space keeps the outlook positive.
Meanwhile, a fascinating development in real estate tech and regulation is unfolding in the multifamily rental market. RealPage, a Texas-based firm whose revenue-management software is used by many large landlords, is facing a DOJ antitrust lawsuit for allegedly enabling coordinated rent hikes. As of Sept 16, at least 9 major cities (including SF and Philly) have banned algorithmic rent-setting tools credaily.com in response to concerns that such software pushes rents up artificially. RealPage is aggressively contesting these restrictions – the company insists its AI platform merely provides price suggestions and doesn’t fix rents, and it plans to sue to overturn some local bans credaily.com credaily.com. The battle is heating up: the outcomes of these cases could set precedents for PropTech regulation nationwide. With rental affordability a hot-button issue, regulators are scrutinizing any tech that might give landlords pricing power. This clash between innovation and regulation in real estate will be one to watch, as it may reshape rent-setting practices and tenant protections in the coming years.
Canada: Sales Rebound and Rate Cut Bets
Canada’s housing market is mounting a modest comeback after a prolonged slump. New data show home sales rose for the 5th straight month in August, up 1.1% (seasonally adjusted) from July reuters.com. At ~43,300 units, last month’s sales were the strongest August since 2021 reuters.com – a notable revival driven by activity in Montreal, Vancouver, and Ottawa, even as the Toronto area lagged. On an unadjusted basis, sales were up 1.9% year-on-year reuters.com. Shaun Cathcart, senior economist at CREA, said “activity has continued to gradually pick up steam” over the past five months reuters.com. Buyer sentiment is improving, and if last year is any guide, fall sales could jump “depending on how many buyers are drawn off the sidelines”, especially if borrowing costs ease reuters.com.
All eyes are on the Bank of Canada, which meets on Sept 17. Most economists in a Reuters poll expect the BoC to cut its overnight rate by 0.25% reuters.com, marking its first rate reduction since the tightening cycle. The Canadian economy has shown signs of strain – the labor market is softening and GDP growth is muted – giving the central bank reason to pivot. At least one more rate cut is predicted next quarter as well reuters.com. The prospect of lower rates is already bolstering housing optimism: many Canadian buyers had been sidelined by 20-year-high mortgage rates, but are now watching for an entry point. CREA’s Cathcart noted that if a September rate cut materializes, it could quickly pull more buyers “off the sidelines” for the fall selling season reuters.com.
Price-wise, Canada’s market is bottoming out but not roaring just yet. The national Home Price Index edged 0.1% lower in August (MoM) and remains 3.4% lower than a year ago reuters.com. However, the average transaction price is up ~1.8% year-on-year reuters.com, indicating that higher-end sales or certain regions are lifting the mean. Sellers are slowly regaining pricing power in some markets as demand improves. Industry insiders describe the scene as fragile but turning upward – if rates indeed fall, pent-up demand could be unleashed, but if cuts are delayed, the rebound may stall. The supply of homes also remains a question; new listings rose in recent months, which helped sales, but construction of new homes has been below needed levels.
On the commercial front in Canada, sentiment is cautious. High borrowing costs have cooled investment, and there are reports of a bid-ask gap between buyers and sellers (similar to the U.S. and Europe). One bright spot: the multi-family rental sector, which benefits from strong immigration and low vacancy rates in cities like Toronto. Canadian investors like Brookfield (mentioned above) are actively pursuing U.S. residential assets, reflecting a strategy to diversify and capture growth abroad even as domestic commercial real estate faces headwinds.
Overall in North America, a theme is emerging: monetary policy tailwinds are forming for real estate. Both the U.S. Fed and the Bank of Canada are set to begin rate-cutting cycles, likely marking a significant turning point. While it may take months for cheaper financing to materially boost home sales or development, the psychological impact on markets is immediate. Equity investors have already bid up REIT stocks (the MSCI U.S. REIT Index jumped 4.3% in August) reuters.com in anticipation of easier money. History suggests that once rates clearly trend down, real estate activity picks up – mortgages refinance, homebuyers come back, and investment deals get repriced. North American markets are now on the cusp of that inflection, even as they navigate the lingering challenges of affordability, supply shortages, and in the U.S., a potential recession. The next 48 hours (with central bank decisions) could set the tone for the rest of 2025’s property markets.
Asia-Pacific: Slumps, Stimulus and Soaring Sales
China: Protracted Downturn and Hopes of Easing
China’s massive real estate sector – a quarter of its economy at its 2021 peak – continues to struggle with a downturn now in its fourth year. Fresh August data confirmed the persistent slide in home prices. New home prices fell 0.3% from July reuters.com, the same monthly drop as in July, signaling no improvement in buyer sentiment. Compared to a year ago, new home prices are down 2.5% reuters.com, a slightly smaller decline than July’s 2.8% fall – perhaps a faint sign that year-on-year deterioration is leveling off. Still, with 57 of 70 cities reporting price decreases in August (month-on-month) and 65 cities down year-on-year reuters.com, the weakness is widespread. Even the secondary (resale) market is depressed: resale home prices dropped 3.5% YoY in tier-1 cities like Beijing and Shanghai, and an even steeper 5–6% in smaller tier-2 and 3 cities reuters.com.
Crucially, property investment has collapsed. Developers’ investment in new projects fell 12.9% in Jan–Aug vs. a year earlier reuters.com, as financing dries up and many builders grapple with debt crises. Floor-area sales are also down ~4.7% year-on-year reuters.com, reflecting weak demand despite developers offering discounts. China’s once-mighty developers (e.g. Evergrande, Country Garden) are in survival mode – several have defaulted or are restructuring, leaving projects unfinished and homebuyers wary. This real estate malaise is dragging on the broader Chinese economy, which is facing deflationary pressure. As Reuters noted, the sector’s prior boom turned bust has become a “heavy drag” on the world’s second-largest economy reuters.com.
In response, Chinese authorities are ramping up support, albeit cautiously. In late August, major cities eased homebuying restrictions: Shenzhen and Shanghai relaxed rules to make more people eligible for mortgages or to purchase a second home reuters.com. Mortgage rates for first-time buyers were cut and some cities reduced down-payment requirements. The government also rolled out an initiative to renovate urban villages, aiming to spur construction jobs and housing supply reuters.com. Thus far, these measures have not ignited a turnaround – they’re seen as necessary but not sufficient.
Market participants are now anticipating stronger medicine. Zhang Dawei, analyst at Centaline, says “significant adjustment pressure” remains and the market is “anticipating stronger measures” to stabilize housing reuters.com. In particular, all eyes are on the Loan Prime Rate decision on Sept 20. Many expect the PBOC to cut rates, which would lower mortgage costs nationwide reuters.com. Already, the central bank trimmed a few other rates in August (including a surprise cut to a key policy rate) and pumped liquidity to support lending. Another lever is relaxing home purchase restrictions in more cities – some analysts predict outright removal of price caps or limits on owning multiple properties in various locales before year-end, to spur buying.
There is also talk of targeted stimulus for housing. Premier Li Qiang in August urged “forceful measures to consolidate the stabilizing trend” in real estate and stimulate housing demand for upgrades (encouraging families to move to bigger or better homes) reuters.com. However, Beijing remains wary of any large-scale bailout or debt-fueled stimulus, given the lessons of the past bubble. The approach has been incremental: small interest rate cuts, local policy tweaks, and encouragement for banks to lend more to viable developers.
So far, analyst sentiment is pessimistic. A Reuters poll found most experts don’t expect China’s home prices to truly bottom out until late 2026 or 2027 reuters.com – about half a year later than they thought just a quarter ago, indicating rapidly waning confidence. The reasons are manifold: weak consumer income growth, rising unemployment (youth joblessness hit record highs before data reporting was suspended), and households still digesting the wealth hit from previous real estate losses reuters.com. Importantly, the glut of unsold homes in smaller cities is enormous, leading buyers to worry about further price drops. With real estate no longer seen as a one-way bet, buyer psychology has changed in China – a stark shift from the frenzy of the 2010s.
There is one relative bright spot: government-driven projects and certain state-backed developers are picking up some slack. Also, segments like rental housing are now encouraged; investors domestic and foreign are looking at rental housing as Beijing pushes a “housing is for living, not speculation” agenda. Yet even rental-focused REITs have had tepid performance. Property stocks remain under pressure – the Hang Seng Mainland Properties Index is down sharply, and on Sept 15 it slid another 2.3% reuters.com on the home price news. Iron ore prices (a proxy for construction demand) also softened reuters.com.
In summary, China’s real estate woes are far from over, but the government’s recent and expected steps (rate cuts, looser credit, lifting buying curbs) suggest a commitment to arrest the decline. The next few weeks are critical: if a rate cut on Sept 20 is larger than expected or accompanied by bold policy, it could boost confidence. If not, the slow bleed in China’s housing market may continue, with global implications (from commodity demand to financial system health). The world’s largest housing market remains in a precarious balance, and Beijing’s policy calibration now is key to whether it finds a floor in 2025 or sinks further.
India: Strong Commercial Uptake, Stable Housing & Policy Vigilance
India’s real estate sector is experiencing a healthy upswing in commercial and retail segments, even as authorities keep a close watch on housing affordability. In the technology and services hubs of India, office space demand is robust. Notably, BlackRock – the global asset management giant – just took up 1.43 lakh sq ft (143,000 sq ft) of office space in Bengaluru on a long-term lease hindustantimes.com, a deal valued at ₹410 crore (~$50 million). This adds to a trend of big-ticket leases by multinationals in India’s Tier-1 cities, reflecting confidence in India’s growth and a shift of some operations from China to India. Delhi-NCR’s office market, which had been sluggish, is set for a revival: it will see a 5 million sq ft supply surge after a decade-long lull hindustantimes.com as new projects complete. Occupiers are reportedly lining up for quality Grade-A offices in Delhi’s suburbs, encouraged by India’s strong GDP growth (over 6% this year) and a stabilizing work-from-office ratio.
On the retail real estate front, shopping malls and high streets are buzzing again. Through 2025 so far, 4 million sq ft of retail space was leased across India, driven chiefly by the food & beverage (F&B) sector’s expansion hindustantimes.com. Restaurant and cafe chains are leading this retail leasing boom, accounting for a significant chunk of new mall occupancy. Industry projections show another 6 million sq ft of retail space will be added by 2028 to meet demand hindustantimes.com. Cities like Mumbai, Bangalore, and smaller tier-2 cities are all seeing new malls and outlets – a sign of resurgent consumer spending and the post-pandemic retail rebound.
The housing market in India, by contrast, is growing but at a more measured pace. Home sales have been strong in 2023–2025, hitting record highs in many cities, yet prices have also surged, straining middle-class affordability. A recent report by rating agency ICRA (as of mid-September) cautioned that housing sales volume may dip ~3% in FY2026 due to affordability pressures and higher interest rates. Indeed, the Reserve Bank of India had raised rates in 2022–23, and those higher mortgage costs are now being felt by buyers, even though the RBI is currently on hold. Still, any cooling is from very high levels – 2025 is on track to be one of the best years for residential sales in over a decade. In Mumbai, India’s priciest market, we continue to see headline-grabbing luxury deals (e.g. a former bank CEO bought a ₹52 crore apartment recently hindustantimes.com). Yet developers are also launching more mid-income projects to cater to demand in suburbs, often with smaller unit sizes to keep ticket prices manageable.
India’s policy landscape is evolving to support sustainable growth. A major development came on Sept 15 when the Supreme Court of India weighed in on speculative investment in real estate. The court termed speculative investors as “slow poison” for the housing sector hindustantimes.com, likening excessive speculation to a toxin that inflates prices and hurts genuine homebuyers. This unusually sharp comment came during a case involving delayed housing projects, and it sends a signal: authorities may crack down on land hoarding, excessive flipping, or other speculative practices that drive up prices. The government has already taken steps like limiting pre-launch sales (to protect buyers) and is considering tightening REIT regulations – SEBI (the securities regulator) just reclassified REITs as “equity” to broaden investor participation hindustantimes.com, which could deepen the funding pool for rental housing and commercial projects.
Another policy focus is affordable housing. With a massive urban population and migration, India has an ongoing program (PMAY) to support low-cost housing. Industry bodies like NAREDCO even suggested observing the Prime Minister’s birthday (Sept 17) as “Right to Housing Day” hindustantimes.com to emphasize housing as a fundamental need. The government’s recent budget also boosted funding for urban housing and incentivized states to simplify housing approvals. These efforts align with ensuring that the real estate boom benefits a wider segment of society, not just the upper end.
In summary, India’s real estate is a story of solid growth with an eye on equity. Commercial realty is thriving, capturing outsourcing and tech growth. Retail space is expanding alongside consumer confidence. Housing sales are high, though the pace may temper slightly as affordability is watched – average mortgage rates around 8.5–9% and rising prices are a pinch for first-time buyers. Importantly, policymakers and courts are proactively addressing potential bubbles or malpractices (like speculation and project delays) to keep the sector healthy. Given India’s strong economy, high demand, and demographic advantages, the real estate outlook remains upbeat. As one developer quipped, the current challenge is not demand – “it’s delivering on time and on budget to meet that demand.” Expect continued momentum in India’s property markets, underpinned by both private investment and public-policy support.
Southeast Asia: Singapore’s Surge and Regional Trends
Several Southeast Asian markets have made real estate news in this period, Singapore’s housing market in particular. In August, Singapore’s private home sales surged to a 9-month high, signaling renewed buyer appetite. Developers sold 2,142 new private homes (excluding government-subsidized units) in August, a huge 128% jump from July’s sales propnex.com. To put it in perspective, this is more than 10 times the number sold in August 2024 propnex.com, when new launches were sparse – highlighting how much the market has rebounded. The strong August was driven by five major project launches that collectively accounted for 88% of sales propnex.com. Buyers rushed to snap up units in these new condos, many of which are attractively located and priced. For example, a large suburban project “Springleaf Residence” sold 884 of its 941 units (94% sold out) in the first month at a median price of S$2,166 psf propnex.com – a stellar absorption rate. Likewise, city-center (“Core Central Region”) projects moved over 500 units in August, the highest CCR sales in over 4 years propnex.com as Singapore saw a resurgence of high-end demand.
One reason for this spike: buyers and developers timed launches ahead of the Lunar Seventh Month (Ghost Month), which fell in early September. Traditionally, many Asians avoid purchasing property during that inauspicious month. So August benefited from a bunching of launches and buyers pulling forward decisions. It paid off – August’s sales were the highest monthly total since late 2024 propnex.com. Year-to-date (Jan–Aug 2025), Singapore developers have sold 7,669 new units, the highest for the first eight months since 2021 businesstimes.com.sg. Property consultants note that this reflects pent-up demand and confidence: Singapore’s population is growing again (post-Covid inflows of expats and permanent residents), and interest rates have likely peaked (the local 3M SORA rate is off highs, mirroring global rate trends). Additionally, cooling measures put in place (like higher stamp duties for foreigners) have tempered speculative froth without crashing the market. Prices in Singapore have been relatively stable in 2025, rising modestly by single digits, which buyers seem to view as a sustainable pace.
Elsewhere in Southeast Asia, the picture is mixed but generally positive:
- Malaysia has seen improved activity in the residential segment thanks to government incentives for first-home buyers and a rebound in economic growth (over 4% GDP growth). However, Malaysia still has an overhang of unsold high-end condos in Kuala Lumpur, so prices remain soft there. The focus has shifted to landed homes and affordable units, which are seeing better uptake.
- Indonesia is experiencing a real estate uptick, especially in Jakarta’s satellite cities. Lower interest rates and a young demographic are fueling housing. The Indonesian government is also courting foreign investors with a new “golden visa” and by allowing more flexibility in owning apartments, which could support the high-end condo market in Jakarta and Bali. Major new city projects, like the upcoming new capital Nusantara, also promise future real estate development (though on Sept 15–16 there was no specific news, it’s a backdrop theme).
- Vietnam had a property cooling in late 2022–2023 due to credit tightening, but recent reports show signs of revival. Developers in Ho Chi Minh City have resumed some projects after interest rates were cut by the central bank earlier in 2025. Still, Vietnam’s recovery is cautious – authorities continue to restrict speculative lending, and developers are restructuring debts.
- Thailand: The Thai housing market is stable; foreign buyer interest (especially from China) in Bangkok condos picked up slightly as travel resumed, but domestic demand is lukewarm due to high household debt. The new government has mooted stimulus for real estate, including perhaps easing mortgage rules.
Overall, Southeast Asia’s real estate markets are largely benefiting from the region’s economic resilience. Most countries here did not face the kind of property bubbles seen in China, and banks remain sound. Singapore stands out as a bellwether: its robust August performance and diverse buyer base (local upgraders, foreign investors from China, India, Europe, etc.) gulfbusiness.com indicate confidence in real estate as a safe asset amid global uncertainties. Moreover, Singapore’s rental yields (~4–5% for mass-market, higher for luxury) remain attractive relative to ultra-low vacancies (rental vacancy under 6%).
Analysts will watch if the sales momentum carries into September and Q4 after the Hungry Ghost month. There are big launches slated later in 2025 in Singapore, and buyers have more choices now – a test of depth of demand. For the region at large, Southeast Asia’s property outlook is cautiously optimistic: supportive demographics, generally low interest rates (many ASEAN central banks haven’t hiked as aggressively or are already easing), and targeted government support bode well, even as global headwinds (e.g. slower China, higher oil prices) pose some risks.
Australia: Recovery Underway Amid Easing Rates and Low Supply
Australia’s property market is navigating a turning point in 2025, shifting from a correction last year to a renewed upswing now, underpinned by earlier-than-expected rate cuts. The Reserve Bank of Australia (RBA) has already cut rates three times in 2025, reversing course after aggressive hikes in 2022. The cash rate has fallen from 4.35% in January to 3.60% by August indiantimes.com.au, providing significant relief to borrowers. These moves – partly prompted by lower inflation readings – have fed through to mortgage rates, which are trending down from their peaks. The result? Buyer sentiment has improved and home prices have started climbing again in most cities.
According to CoreLogic (via Cotality data), Australian home values have risen for six consecutive months through July propertyupdate.com.au. In July, national housing values were up +0.6% (MoM) propertyupdate.com.au, matching the average monthly gain seen since May. Though the increases are modest, they mark a clear stabilization after the declines of 2022–early 2023. Over the last quarter (May–July), prices are up ~1.8%, the strongest quarterly growth since mid-2022 propertyupdate.com.au. This steady uptick is fueled by classic supply-demand dynamics: buyer demand is outstripping supply. Tim Lawless of CoreLogic notes listings nationwide are ~20% below the 5-year average propertyupdate.com.au – so there simply aren’t enough homes on the market, which gives sellers leverage and nudges prices higher. Meanwhile, consumer confidence is rebounding with each RBA rate cut, as the prospect of cheaper credit and a more benign interest-rate outlook encourages households to house-hunt again propertyupdate.com.au propertyupdate.com.au.
However, Australia’s market rebound is uneven across regions and property types. A “two-speed market” is emerging propertyupdate.com.au. The smaller capitals and more affordable regions are seeing faster growth: Darwin led with +2.2% in July, Perth +0.9%, Adelaide +0.7% propertyupdate.com.au – buoyed by relative affordability, strong local economies (e.g. mining in WA), and population gains from both overseas and interstate migration. In contrast, the big cities like Sydney (+0.6%) and Melbourne (+0.4%) rose more slowly in July propertyupdate.com.au; these markets had larger booms and busts earlier, and remain pricey, so buyers are more price-sensitive. Melbourne and Canberra have lagged a bit, reflecting factors like higher unemployment or people moving to other regions.
A key trend is the record gap between house and unit (condo) prices propertyupdate.com.au. Free-standing house prices skyrocketed during the pandemic (as buyers sought space), widening the premium over apartments. Now that gap, at historic highs, is acting as a “handbrake” on further house price growth propertyupdate.com.au – many buyers are priced out of houses and looking at units. Indeed, we’re seeing unit prices climbing more briskly in some areas as relative bargains. Affordability remains a challenge: despite recent rate cuts, mortgage rates are still higher than 2021 levels and home values in cities like Sydney are near record highs. Housing affordability is severely stretched, with first-home buyers needing over 10 years of savings for a deposit in some cases. This constraint is likely to cap how fast prices can rise from here.
Meanwhile, Australia’s rental market is in crisis mode. Vacancy rates are stuck around 1.7% nationally – near all-time lows propertyupdate.com.au – and in some cities like Perth and Adelaide it’s under 1%. This has led to re-accelerating rent growth in 2025 after a brief moderation. Rents are rising at double-digit annual rates in several capitals, compounding the cost-of-living pressures on renters. There’s effectively “no relief in sight” for renters, as one report put it propertyupdate.com.au, because new housing construction is sluggish (thanks to high construction costs and labor shortages). The RBA’s rate cuts should, in theory, make it easier to finance new developments, but builders are cautious after some construction firms collapsed in 2023. The government has stepped in with some measures – e.g. the new Housing Australia Future Fund aims to build 30,000 social and affordable homes, and some states have capped rent increases or expanded tenant rights – but these are medium-term fixes.
On the policy front, the recent change in RBA leadership (Michele Bullock took over as Governor on Sept 18) comes with a comprehensive review of the RBA. There is talk of dual inflation and employment mandates, which might make the RBA more dovish and pro-growth. For the housing market, this could mean a more accommodative stance going forward, reinforcing the trend of falling interest rates. Australian banks, for their part, remain sound and have low levels of non-performing housing loans (helped by low unemployment). So, a credit crunch is not an issue – the issue is borrowers’ capacity, which is improving with each rate cut.
In summary, Australia’s real estate upturn is underway, but not a boom – more of a controlled rebound. The phrase “steady, modest growth” propertyupdate.com.au best describes it. Expectations for the rest of 2025 are for continued price gains (KPMG now forecasts +4.9% for 2025 nationally, up from 3.3% earlier kpmg.com) assuming the RBA delivers even more rate relief. As one analyst put it, lower rates and chronic undersupply are “powerful tailwinds” pushing prices up, but affordability and high debt loads are equally strong headwinds pulling back propertyupdate.com.au. For now, the tailwinds are winning, “but only just” propertyupdate.com.au. Investors and first-home buyers alike are tiptoeing back into the market, and Australia might well have put the worst of its property downturn in the rearview mirror.
Europe: Cooling Markets and Policy Interventions
United Kingdom: Prices Slip, Rents Ease, Policy in Waiting
The UK housing market, once red-hot, is clearly losing momentum under the weight of higher interest rates and economic uncertainty. New data from early September show asking prices for homes are down 0.1% year-on-year reuters.com – the first annual decline in nearly 20 months. Sellers in Britain had to temper their price expectations, especially in the south of England, where pricier homes have been hit by stretched affordability and fears of tax changes reuters.com. While there was a small +0.4% uptick in asking prices in early September versus August (a normal seasonal rise as autumn listings come on), Rightmove noted this increase was smaller than usual for the time of year reuters.com, following three straight months of price falls. In short, prices are essentially flat to falling in real terms, a stark change from the pandemic boom.
A key factor weighing on sentiment is the specter of tax hikes. Colleen Babcock of Rightmove pointed out that “rumours of property tax changes” began swirling in mid-August reuters.com. The context: the UK’s Finance Minister (Chancellor) will deliver an Autumn Budget on Nov 26, and many expect Rachel Reeves (the likely chancellor) to raise taxes to bolster government revenues. Speculation includes possible changes to capital gains tax on property, higher council taxes on expensive homes, or even new charges for second homes. This extended uncertainty is causing some would-be buyers and sellers – particularly at the upper end – to hold off, dampening activity reuters.com. Rightmove indicated that the slight price dip year-on-year was largely driven by the affluent southern regions (London, Southeast), which are more “vulnerable to increased property taxes” and also where affordability was most strained after interest rate rises reuters.com.
On the rental side, there’s a glimmer of relief for tenants: rent growth has finally cooled. A Zoopla report showed average rents up 2.4% year-on-year reuters.com in recent weeks – still rising, but at the slowest annual pace in four years. For context, UK rents were soaring 10–12% annually in late 2022; that pace has moderated significantly. The average monthly rent nationwide is now £1,300 (US$1,760) reuters.com. Richard Donnell of Zoopla attributes the cooling to improving supply – the number of homes available to rent has increased, partly because lower immigration (post-pandemic and post-Brexit) and more first-time buyers (thanks to slightly better mortgage availability) have eased the fierce competition for rentals reuters.com. Indeed, some landlords who locked in low-rate mortgages earlier are holding onto their buy-to-let properties and benefiting from rising rents, rather than selling. Zoopla still expects rents to end the year about +3% higher than Jan reuters.com, but that’s a far cry from the previous years’ spikes.
The broader economic backdrop in the UK is one of tentative improvement on inflation but growing concerns on growth. Inflation has been coming down (around 6.7% in August, from double digits last year), and wage growth is strong, which together are easing real income pressures slightly. The Bank of England, which aggressively hiked rates to 5% earlier in 2025, is now likely to pause or even had begun cutting by mid-September. As of Sept 18, the BoE was expected to hold Bank Rate at 4.0% reuters.com (this suggests markets anticipated that by September the BoE had already cut from 5% to 4% in prior months, a detail to clarify: possibly a Reuters typo or assumption of cuts in summer). In any case, financial markets are betting the next BoE rate cut will come in spring 2026 reuters.com, indicating a long plateau. With borrowing costs to remain relatively high for a while, housing demand will stay subdued. Mortgage approvals are down, and first-time buyers face stringent affordability tests (though lenders have started to extend mortgage terms to 40 years to bring monthly payments down).
One emerging theme is regional divergence: Northern England and Scotland, where homes are cheaper, are holding up better in terms of price (some areas still seeing modest gains year-on-year), while the South and expensive pockets (London’s prime boroughs, etc.) are seeing price drops and longer sales times. Cash buyers (often downsizers or investors) are more active now since they aren’t rate-sensitive, whereas mortgaged buyers (especially younger households) have stepped back.
Looking ahead, the UK housing market is delicately poised. If the BoE has indeed finished tightening, that removes a major headwind. However, any new housing-related taxes this autumn could hit sentiment again. Also, a general election is on the horizon (by 2025 end), and housing is shaping up as a battleground issue – opposition parties are criticizing housing affordability and proposing reforms (like higher housebuilding targets, reforming planning rules, or tenant protections). Political uncertainty may also make buyers cautious in the coming months.
In the commercial property arena in the UK, the story is similar to the rest of Europe: repricing and stress. Office valuations are down sharply (UK office capital values were ~20% below their 2021 peaks mid-2025), retail is mixed (supermarkets strong, shopping malls weak), while industrial/warehouses are cooling after a huge run-up. Notably, some UK homebuilders are showing resilience: e.g. MJ Gleeson, a builder of affordable homes, reported this week that while its annual profit fell, it has strong forward sales booked for the next year reuters.com – suggesting underlying housing demand for affordably priced new homes remains robust. Such companies are tailoring products to what buyers can afford (smaller homes, building in cheaper land areas) and seem to be coping.
Summing up for the UK: a gentle correction is underway in residential markets, which policymakers seem content to allow after years of rapid price inflation. First-time buyers may finally catch a slight break if wages rise and prices stagnate. But with interest rates still elevated and potential new taxes, the housing market likely faces a slow 6–12 months ahead. Industry voices are calling for measures to support construction and transactions – for example, the Royal Institution of Chartered Surveyors (RICS) has flagged declining buyer inquiries and house price expectations turning negative uk.finance.yahoo.com, advocating perhaps for stamp duty tweaks or stimulus for new builds. For now, though, the trend is a cooler, more buyer-friendly market than the frenetic days of 2021, albeit one still plagued by insufficient supply of affordable homes.
Eurozone & EU: “Zombieland” Commercial Sector and Housing as a Social Right
Across the Channel in the Eurozone, real estate markets are also facing headwinds from high interest rates, but the policy response is gaining momentum. The European Central Bank had raised rates through mid-2025 (the deposit rate reached 4%), which has seriously curbed real estate lending and investment. By September, however, with Eurozone inflation easing and growth faltering, the ECB signaled a pause – and analysts expect rate cuts in 2024. The lag from past hikes means current conditions remain tight: mortgage rates in countries like Germany and France are around decade highs, causing home sales volumes to drop and prices to stagnate or decline slightly in many cities.
The commercial real estate market in Europe is arguably in worse shape. A Reuters analysis in July aptly described it as stuck in a “zombieland” state reuters.com – neither fully alive nor collapsing, but with very low transaction activity. By mid-2025, European commercial property sales were at a near-decade low; Q2 cross-border investment into Europe’s real estate was down ~20% year-on-year, the weakest in 10 years reuters.com. Would-be buyers are on the sidelines because they expect prices to fall further, while many sellers (often institutional investors or open-end funds) are refusing to acknowledge lower valuations and holding out (hence the “extend and pretend” on loans and assets) reuters.com.
This standoff has frozen deals in sectors like offices – notably, London saw a flagship office tower (CityPoint) put up for sale then pulled after bids came in too low reuters.com, and in Germany, the partially distressed Trianon skyscraper in Frankfurt was just put on sale by a receiver in a rare test of that market reuters.com. Sebastiano Ferrante of PGIM summarized the scene: “We have ‘zombieland’… stranded assets, no liquidity.” reuters.com Assets out of favor – think older offices in secondary locations, or aging shopping malls – have almost no buyers and likely “more pain to come” in values reuters.com. On the flip side, certain segments are holding up: rental housing is undersupplied and still attracting investor interest reuters.com, and Ferrante notes logistics and hotels present buying opportunities (their fundamentals are comparatively solid, with tourism rebounding and e-commerce demand steady) reuters.com.
Interestingly, private equity real estate funds in Europe have faced fundraising challenges, as investors pivot to higher-yielding opportunities. Private credit funds, for example, raised almost double the capital that real estate funds did in H1 2025 reuters.com – reflecting perhaps that debt investments are more appealing in a high-rate environment. Still, both are on track to raise more than in 2024, showing there is long-term confidence that once repricing finishes, real estate will offer value. Investor sentiment surveys hit multi-year lows in mid-2025 for European real estate reuters.com, matching the sour mood in the U.S., but there’s a sense that the worst of sentiment may be passing as rate hikes end.
Amid these market dynamics, European Union officials are treating housing as a political priority. On September 13–14, in the run-up to her State of the Union speech, Ursula von der Leyen previewed a focus on housing, and indeed on Sept 15 in Strasbourg she devoted a notable part of her speech to Europe’s housing crisis housing.ec.europa.eu housing.ec.europa.eu. She starkly framed it not just as an economic issue but a “social crisis” that “tears at Europe’s social fabric” housing.ec.europa.eu. She cited telling stats: house purchase costs up >20% since 2015 across the EU, and building permits down >20% in the last five years housing.ec.europa.eu – meaning supply isn’t keeping up with need. This has real human impacts: essential workers (nurses, teachers) can’t afford homes near their jobs, students foregoing education due to rent, young families delaying formation housing.ec.europa.eu.
In response, von der Leyen announced the First European Affordable Housing Plan to be unveiled by year-end housing.ec.europa.eu. Key elements she listed include: overhauling EU State Aid rules to allow national and local governments more leeway in subsidizing or investing in social and affordable housing housing.ec.europa.eu; pushing for faster building permits – likely sharing best practices or setting targets to cut red tape in construction (Europe notoriously has slow permitting processes); and a new legal initiative on short-term rentals (e.g. Airbnb) to “tackle the remaining issues” housing.ec.europa.eu – likely aiming to free up more long-term rental housing by curbing excessive tourist rentals in city centers. She also plans to convene the first-ever EU Housing Summit housing.ec.europa.eu, bringing together Member States, cities, and stakeholders to keep housing at the top of the agenda.
This is significant because housing policy is usually a national issue; the EU stepping in reflects its rising importance. If EU State Aid rules are relaxed, it could pave the way for more public housing investment – for instance, allowing governments to inject money into affordable projects or offer developers subsidies/tax breaks without breaching competition rules. Additionally, by labeling housing a “right” and recalling that the EU’s Social Pillar includes housing housing.ec.europa.eu, Brussels is nudging countries to treat it as part of fundamental welfare – potentially leading to larger programs or spending. Countries like France and Germany are already deploying measures: France just extended rent caps in big cities and is debating tax breaks for landlords who charge below-market rent; Germany unveiled a £14 billion plan to boost construction (including subsidies for climate-friendly renovations and first-time buyer support). But Germany also faces an acute slump: its property transactions fell further in H1 2025 reuters.com, and big developers like Vonovia have halted projects because rising costs made them unviable – a situation Berlin is trying to counter with subsidies.
In the Eurozone housing markets, there is a divergence: previously overheated markets such as Germany, the Netherlands, and Nordic countries saw price declines of ~5-10% over the last year (as of Q2 2025) as rates soared, whereas markets like Spain or Italy (which didn’t boom as much) have been more stable. There are early signs that the home price correction is bottoming out: e.g., Dutch home prices started rising slightly again over the summer. With the ECB likely done hiking, confidence might return gradually. But don’t expect a big rebound – the ECB signaled it will keep rates high for as long as needed to tame inflation, so mortgages will remain expensive. Instead, Europe might see a period of stagnant but not crashing house prices, with affordability slowly improving as incomes rise (assuming inflation moderates).
In sum, Europe’s real estate is in a cautious phase. Policymakers are stepping in to support housing (demand and supply sides), recognizing its social importance. The commercial sector is in flux, waiting for clarity on values and the economy. The next moves by central banks (ECB, BoE) and the success of policy measures (like the EU housing plan, or how the UK and Germany stimulate building) will heavily influence Europe’s property outlook for 2026. For now, the theme is adjustment – in prices, in policies, and in expectations – as the era of ultra-cheap money and ever-rising values has given way to something of a reset.
Middle East: Gulf Real Estate on the Rise, Investment Flows Increase
In contrast to the challenges facing Western markets, the Middle East – particularly the Gulf states – is experiencing a real estate upswing fueled by high oil revenues, economic diversification drives, and population growth. Nowhere is this more evident than in the United Arab Emirates, especially Dubai. As noted in the Key Facts, Dubai’s property market is surging to new heights. August 2025 was a record-breaking month: 17,879 real estate transactions worth AED 42.4 billion (~$11.5 billion) were registered gulfbusiness.com. These figures represent a 17% increase in volume and 12% in value year-on-year gulfbusiness.com, confirming that Dubai’s post-pandemic boom is not only sustained but broadening.
What’s driving this Dubai boom? Several factors:
- Investor and Resident Confidence: There’s a palpable shift of Dubai’s image from a transient expat post to a long-term home. Engel & Völkers reported a significant trend of tenants turning into buyers – many residents now see Dubai as a permanent base and want to own their homes gulfbusiness.com gulfbusiness.com. This is a departure from the past when people came for a few years, rented, and left. It reflects both the city’s stability and the high rents that make buying more attractive for those with means.
- Ultra-Low Tax, Pro-Business Environment: Dubai’s government has implemented investor-friendly policies – easy residency visas (golden visas for property buyers), 0% property tax, and a generally pro-business climate. This draws foreign capital. Mahdi Amjad of Omniyat Group remarked that global capital keeps flowing to Dubai thanks to its “safe, stable governance” and “dynamic diversification” gulfbusiness.com. Indeed, Dubai’s appeal is its combination of visionary projects and regulatory clarity – you can build ambitious, ultra-luxury projects and trust the rules won’t abruptly change gulfbusiness.com.
- Diverse Demand Base: The buyer mix in Dubai is truly international. In recent transactions, Indians, Brits, Germans, Egyptians, Chinese, and of course GCC nationals are prominent gulfbusiness.com. This diversification means the market isn’t solely reliant on one region’s economy. When Russian buyers slowed (due to geopolitical issues) others picked up, for instance. Also, local end-users are now a big force in the secondary market gulfbusiness.com (helped by mortgages with high LTVs ~80% and still moderate interest ~3.9% in UAE gulfbusiness.com).
- Robust Fundamentals: Population growth (Dubai’s population crossed 3.5 million and climbing), strong job creation (especially in tourism, finance, tech), and limited supply in certain segments (e.g., high-quality family villas) have led to genuine supply-demand tightness. Dubai’s rental yields average ~6.7% (7.1% for apartments) gulfbusiness.com, far higher than yields in London or Hong Kong gulfbusiness.com, making it attractive for investors. Even though new supply is coming, much gets absorbed off-plan.
- Strategic Projects: The government and private developers are delivering new “cities within the city” (e.g., Dubai South, Creek Harbour, Expo City) and niche luxury projects (like Lumina by Omniyat mentioned gulfbusiness.com). These keep buyer interest high and often launch to sell-out response.
As a result of all this, property prices in Dubai continue rising. August data show average prices +16.3% year-on-year gulfbusiness.com. Some villa communities skyrocketed: e.g. Victory Heights up 37% YoY, Dubai Hills +26% gulfbusiness.com. The luxury end is particularly on fire; record sales like villa transactions exceeding $50 million have made headlines in 2025. However, note that despite booming sales, residential rents have somewhat stabilized – leasing volumes actually fell 4% YTD and new rental contracts dropped 14%, as many tenants exited the rental market to buy gulfbusiness.com. Renewals still rose slightly, and with population growth, rents remain high, but it’s interesting that the rally is now more in the sales market than rentals, a sign of end-user ownership increasing.
Elsewhere in the Gulf:
- Abu Dhabi (UAE’s capital): also enjoying growth, especially in its commercial and industrial real estate. An Abu Dhabi property exhibition (IREIS 2025) reportedly saw “global investors flocking” instagram.com. Demand is high for prime office space due to new free-zone initiatives and an influx of companies. Residentially, Abu Dhabi is smaller than Dubai but has stable demand, with prices creeping up in sought-after areas (Saadiyat Island, Yas Island). A news report on Sept 15 noted “real estate growth accelerates, need new supply” in Abu Dhabi uaenews247.com, highlighting that inventory is tightening as well.
- Saudi Arabia: The Kingdom is in the midst of an unprecedented development wave under Vision 2030. While not an overnight property “boom” in the transactional sense (since many projects like NEOM are still in early stages), Riyadh and Jeddah’s real estate markets are very active. The government’s Sakani program continues to help Saudis buy homes, boosting residential construction. On Sept 16, Red Sea Global (Saudi’s sovereign developer) showcased “Shura Island” – a new luxury tourism island project in the Red Sea, with properties slated for completion by end of 2025 kdow.biz. It’s part of a larger Red Sea Project aiming at ultra-luxury resort real estate (villas, hotels for sale or lease to the uber-wealthy and operators). These signature projects put Saudi on the map for international real estate investors in tourism/hospitality.
Additionally, Saudi Arabia’s sovereign wealth fund (PIF) and other Gulf SWFs are making big real estate investments abroad. For instance, Bloomberg reported Middle Eastern sovereign funds have poured tens of billions into Western property – from warehouses in Europe to U.S. luxury hotels – taking advantage of lower valuations. (One snippet: Dubai’s Investment Corporation plans to list a unit that runs a huge mixed-use project bloomberg.com, showing how even state entities are monetizing real estate assets).
- Qatar: After the FIFA World Cup 2022, Qatar’s real estate saw a boost, and the momentum carries on. A government weekly report for late August showed 394 million QAR ($108m) in property sales in just one week arabnews.com – an 18.5% jump from the week prior arabnews.com. These sales spanned vacant land, houses, residential buildings, mixed-use complexes arabnews.com, with most activity in Doha and suburbs like Al-Rayyan arabnews.com. It underlines how Qatar’s market is dynamic, supported by domestic and regional investors. Qatar is also opening up more areas to foreign ownership to attract overseas buyers as it diversifies beyond LNG wealth.
- Egypt and Turkey (wider Middle East): Egypt has a construction boom (new cities, new capital) but an economic crisis and currency devaluation have made real estate a hedge for wealthy Egyptians while putting strain on lower-income housing. Not directly in Sept 15–16 news, but regionally noteworthy. Turkey’s property market has been a hotspot for foreign buyers (especially Russians, Iranians) due to a weak lira, though new regulations now restrict some foreign purchases.
In summary, the Middle East’s real estate narrative in mid-September 2025 is one of strength and growth, almost a mirror image to the West’s cooling. High energy prices have filled government coffers, enabling huge projects and keeping domestic liquidity high. Developers are ambitious, and buyers – both local and foreign – are responding. As long as oil stays relatively high and regional stability holds, Gulf real estate will likely continue its upward trajectory. However, it’s not without risk: if global growth slows significantly or oil demand falls, the region could face headwinds. But for now, the Middle East remains a bright spot on the global real estate map, attracting capital and attention with mega-developments and impressive market performance gulfbusiness.com.
Sources: Recent news and analysis from Reuters, Hindustan Times, Reuters Real Estate News, CRE Daily, Gulf Business, PropNex Singapore, European Commission, and other industry reports reuters.com realestatenews.com reuters.com reuters.com hindustantimes.com gulfbusiness.com reuters.com reuters.com housing.ec.europa.eu credaily.com credaily.com, as of September 15–16, 2025.
