- U.S. Housing Slump: Existing home sales in Aug held at ~4.00M (–0.2% MoM) reuters.com. New home sales spiked 20.5% (Aug, to a 3½-year high) reuters.com – largely seen as a fluke reuters.com. Single-family construction fell sharply (Aug starts –7% to 890k units, a 2½-year low) reuters.com as builders battle bloated inventories reuters.com. Mortgage rates have eased (30‑yr ≈6.3%) but remain high, slowing demand reuters.com. Fed cut rates to 4.00% in mid-September, but credit conditions and job fears still weigh.
- Canada Recovers Slowly: National home sales rose 1.1% in August (fifth straight monthly gain) reuters.com, with average prices up ~1.8% YoY reuters.com. CREA’s Shaun Cathcart notes activity is “gradually pick[ing] up steam” and may jump if the BoC’s Sept rate cut to 2.5% fuels demand reuters.com aljazeera.com. Still, affordability pressures linger – Toronto saw a 1.8% MoM sales drop in Aug and prices down ~5% YoY reuters.com reuters.com, as homebuyers remain sidelined reuters.com.
- UK/Europe Slowdown: UK home prices are flat-to-falling – September asking prices down ~0.1% Y/Y reuters.com – and rents rising at only ~2.4% (a 4-year low) reuters.com. Analysts blame tighter mortgage access, lower immigration and uncertainty over looming tax changes (November budget) for the slowdown reuters.com reuters.com. Across Europe, housing activity is uneven: Germany saw Q2 prices +3.2% Y/Y reuters.com, but the sector is sagging (corporate insolvencies up 33% through Aug) reuters.com. Commercial property remains weak – PGIM calls Europe’s office/retail market “zombieland” with few deals reuters.com – while undersupplied rental apartments still attract investors.
- Asia – China Down, India Up: China’s property slump deepens. A Reuters poll projects home prices to fall ~4–5% in 2025 reuters.com as buyer confidence stays low. Beijing has cut mortgage rates and down-payment ratios reuters.com, but PBOC held benchmark loans steady in Sept (1yr LPR 3.00%, 5yr 3.50%) reuters.com. Experts expect modest easing before year-end reuters.com. Fitch’s Lulu Shi warns “escalating U.S.-China tensions… [are] further dampening homebuyer sentiment” reuters.com. In contrast, India’s market is booming: home prices are forecast up ~6–7% in 2025–26 reuters.com, driven by wealthy buyers. A huge gap in affordable housing (10M+ unit shortfall) is pushing more people into rising rents (poll: rents +5–8%/yr) reuters.com. RBI rate cuts (to 5.50%) have barely improved affordability reuters.com. “Entry-level buyers are likely to be priced out,” notes a Delhi realtor, as the market skews toward premium homes reuters.com.
- Australia’s Modest Upside: Polls see steady growth: house prices could rise ~5%+ this year reuters.com, helped by RBA rate cuts (to 3.6%, with more to ~3.1%). But affordability remains stretched (median home ≈A$849k as of Aug) reuters.com. Barrenjoey’s Johnathan McMenamin expects lower rates will “put upward pressure on the housing market” reuters.com. However, supply is tight; Metropole’s Michael Yardney warns that in such an undersupplied market “lower rates…can actually push prices further out of reach” for buyers reuters.com.
- Middle East Boom: Dubai’s market is roaring. Over 123,000 homes sold YTD 2025 (through Q3) – Q2 sales hit a record AED 184.3 billion (+49% YoY) cbnme.com cbnme.com – led by luxury projects. Major developers are ramping up ultra-luxury and lifestyle complexes. In Saudi Arabia, Riyadh moved to rein in runaway rents: effective Sept 25, a five-year rent freeze is imposed on all residential/commercial leases within city limits cbnme.com, alongside mandatory lease registries and dispute panels. The package (backed by Crown Prince directives) aims to protect tenants and “bring long-term stability” to the market cbnme.com cbnme.com.
- Latin America Trends: Inflation and policy shifts. Brazil’s mid-Sept inflation ticked up to 5.32% Y/Y, partly due to housing costs (+3.31% in the month) reuters.com, even as the central bank held rates at a 20-year high (15%) for now. Economists expect inflation to moderate (“disinflation to continue” after base effects) reuters.com. Elsewhere, governments are boosting housing supply: e.g. Mexico City recently launched plans for thousands of new affordable rental apartments to ease a housing crunch (a long-term anti-gentrification strategy).
- Investment & Forecasts: Globally, institutions remain cautious. Major surveys and polls suggest moderate gains in many markets but persistent challenges in commercial real estate. For example, NAR projects U.S. existing-home sales rising to ~4.47 M in 2025 and over 5 M in 2026, with price gains roughly matching inflation reuters.com. ANZ forecasts UK house prices to rise only slowly, giving first-time buyers some relief reuters.com. PGIM’s Europe analysts warn of low transaction volumes (“zombieland” toll) reuters.com, while Asia forecasts note China’s housing downturn.
U.S. Housing: Stuck in a Rut
The U.S. residential market is flat-to-weak despite recent rate cuts. The National Association of Realtors (NAR) reported that existing-home sales in August were about 4.00 million (at a 2008–2009–era low pace) reuters.com, barely changed from July. NAR chief economist Lawrence Yun attributes this to high mortgage costs, but he is hopeful: “Mortgage rates are declining and more inventory is coming to the market, which should boost sales” reuters.com. Indeed, 30-year mortgage yields have fallen to roughly 6.3%, after peaking above 7%, thanks in part to the Fed’s September rate cut to 4.0%. But almost every other metric is depressed.
Builders Are Slowing: Single-family housing starts plunged in August: down 7.0% to an annualized 890,000 units (the lowest since April 2023) reuters.com. Groundbreakings in the South were especially weak (–17%), reflecting a severe oversupply there. Permits for new single-family homes also fell (2.2% drop to 856,000) reuters.com. Economists say a correction was overdue – there is a glut of unsold new houses. Santander’s Stephen Stanley urges builders to finally “bite the bullet and cut back on the number of homes they are starting” to unwind the inventory overhang reuters.com. Census data show overall starts down 8.5% in Aug (to 1.307M units), the lowest since May 2020, as even multifamily has cooled reuters.com.
Volatile Sales Reports: There was an odd outlier in the data. Commerce Dept. figures show new home sales jumped 20.5% in August (to an 800,000 annual pace) reuters.com, the strongest in over 3½ years. But economists immediately cautioned that this spike was likely temporary. Santander’s Stanley again: “I expect that this spike in sales will be largely reversed in coming months,” he said reuters.com. The surge was broad-based (big gains in every region) and against a backdrop of weakening builder sentiment. In short, most see housing demand as stuck in a sluggish rut. Pantheon Macro’s Samuel Tombs points out that “consumers’ low confidence and heightened concerns about job security represent ongoing headwinds to demand,” likely keeping residential investment a drag on growth through mid-2026 reuters.com.
Pricing & Flips: Home prices nationally are barely rising: median existing-home price was ~$422,600 in August (only ~+2% YoY) reuters.com. Investors who flip houses are facing their worst margins since 2008. An ATTOM analysis found flipping returns at just 25.1% in Q2 2025 (the lowest in 17 years) attomdata.com as purchase costs rose. In the words of ATTOM’s Rob Barber: “Profit margins on flipped homes are as squeezed as they’ve been in nearly two decades” attomdata.com.
Forecasts: Looking ahead, Wall Street and analysts expect only modest improvement. NAR forecasts existing-home sales of about 4.47M in 2025 and over 5.0M in 2026 (versus ~4.0M in 2024) reuters.com, with price gains roughly in line with inflation. Freddie Mac now sees 30-year rates at ~5.9% next year, edging up in 2026. In short, the U.S. market is range-bound until rates fall further and confidence recovers.
Canada: Early Rebound with Soft Spots
Canada’s housing market is showing tentative signs of life after a prolonged downturn. The Canadian Real Estate Association reported that national home sales in August rose about 1.1% from July (marking a fifth consecutive monthly increase) reuters.com. Home prices have similarly stabilized: the national average price is now ~$637,000, about 1.8% above last year reuters.com. Shaun Cathcart, CREA’s senior economist, said “activity has continued to gradually pick up steam over the last five months” reuters.com. He adds that if the Bank of Canada delivers the widely expected rate cut on Sept. 17 (which it did, easing to 2.50%) “sales could really pick up if buyers who have been on the sidelines return” reuters.com aljazeera.com. In other words, lower rates and a bit more inventory may finally coax hesitant buyers back.
However, local markets still face affordability hurdles. Greater Toronto saw August sales drop 1.8% MoM and price indices are well below last year: the Toronto REALTORS® index was down 5.2% Y/Y in Aug reuters.com reuters.com. Toronto’s chief economist Jason Mercer notes that even with recent rate cuts, “it’s still hard to afford the average monthly mortgage payment” in the GTA reuters.com. He believes more relief (and more listings) is needed to mobilize would-be buyers. Overall, Canada is “on a trajectory of a slow rebound,” say analysts: steady demand returns gradually, but high costs and low supply will limit any price surge in 2025.
UK & Europe: Weakness and Uncertainty
In the UK, real estate is languishing under high rates and policy jitters. Surveys in mid-Sep show the market essentially flat. Rightmove reported that new asking prices in early September were down ~0.1% from a year ago reuters.com – the first annual decline since Jan 2024. The decline was concentrated in higher-end homes (London and the South) where rumors of an incoming mansion tax and stamp duty hikes have scared buyers. As Rightmove’s Colleen Babcock explains, “Rumours of property tax changes began swirling in mid August… this kind of extended uncertainty can affect market activity” reuters.com. Asking prices did tick up ~0.4% from August, but that was smaller than normal seasonal gains and followed several months of falls.
On the rental front, rent inflation is also cooling. Zoopla’s latest data show rents up only ~2.4% YoY (the weakest pace in four years) reuters.com. Zoopla’s Richard Donnell attributes this partly to demographic shifts – “lower migration and better mortgage availability for first-time buyers are easing competition for rented homes” reuters.com. In other words, the surge in rents seen earlier in the cycle is receding now that fewer foreign renters are coming in and some buyers are returning with better loan terms.
Elsewhere in Europe, the picture is mixed. In Germany, prices of existing homes rose ~3.2% in Q2 YoY reuters.com (helped by strong cities), but the overall economy shows strain. Deutsche Bank economist Andreas Naujoks warns that Europe’s property troubles are unfolding gradually: “the crisis isn’t a Lehman-style bang but rather coming in fits and starts” reuters.com. Indeed, commercial real estate is still weak – a report by PGIM Real Estate notes that Europe’s office and retail markets suffer from near-zero volumes (a “zombieland” of sellers and few buyers) reuters.com. In contrast, undersupplied apartment rentals remain popular with investors. Overall, Europe’s housing recovery remains elusive while investors await clearer signals (e.g. from ECB policy and energy costs).
China & Asia: Government Supports Amid Slump
China’s property market continues to struggle despite policy support. Analysts expect further price declines this year. A recent Reuters poll showed experts now see new-home prices falling about 4.8% in 2025 (revising previous forecasts sharply downward) reuters.com. Beijing has rolled out many measures – from cuts in mortgage rates to lower down-payments for second homes reuters.com – but buyers have not returned en masse. As Fitch’s Lulu Shi puts it: “Escalating U.S.-China tensions… [will] further dampen homebuyer sentiment” reuters.com. For now, the PBOC kept key lending rates unchanged in September reuters.com (1-yr LPR at 3.00%, 5-yr at 3.50%), citing improved trade conditions. However, banks and analysts still expect modest easing: Barclays and SocGen forecast small cuts in policy rates and reserve requirements in Q4 reuters.com to prop up growth. Developers still face heavy debt loads, and government sources suggest state firms may again buy up unsold housing stock – a tactic seen since last year – to stabilize prices.
In broader Asia, other markets are diverging. India’s boom continues: housing demand (especially luxury) has outstripped supply of affordable units. A Reuters survey of 20 Indian housing analysts forecasts home prices +6.3% in 2025 and +7.0% in 2026 reuters.com, well above the 4% gains of 2024. Median urban rents are also expected to rise 5–8% next year reuters.com. Colliers’ Ajay Sharma notes a troubling gap: “strong macro numbers have not benefited the population at the lower side of the pyramid… their disposable incomes have stagnated” reuters.com. In practice, this means more people are stuck renting. “With the market leaning heavily toward premium and luxury homes,” says developer Avneesh Sood, entry-level buyers risk being “priced out, even with policies that look good on paper” reuters.com. Despite several RBI rate cuts (now 5.50%), affordability remains tight and experts warn of further policy focus on affordable housing.
Japan’s housing market is subdued (inflation is now just above target but housing investment “weak” reuters.com), and India’s trend shows acceleration in prices. In general, Asia’s hot spots are high-cost cities (Shanghai/HK, Mumbai/Delhi, Sydney/Melbourne) where yields are low, while lower-tier cities lag.
Australia: Cautious Recovery
Australia’s residential sector is gradually improving. A Reuters poll (Sep 18–Aug 8) of 15 analysts predicts house prices +5% in 2025 (up from a +4% call in Q2) reuters.com, reflecting renewed demand after RBA rate cuts. The central bank has eased rates by 75 bps since Feb (now 3.6%) and signals another cut to ~3.1% by early 2026. Lower borrowing costs are indeed lifting activity: analysts say rate cuts have “trimmed mortgage repayments and supported modest buyer activity” reuters.com.
Yet affordability is a big constraint. The national median home value is now about A$849k (as of Aug) – nearly eight times average income reuters.com. Many first-time buyers are sidelined. Research firm Coality notes that, despite rate cuts, housing supply remains tight: building starts are low and construction lags. In this environment, warns Metropole founder Michael Yardney, even well-intentioned rate cuts can backfire for buyers: “Lower rates are intended to improve affordability, but… when they fuel demand in markets with chronic undersupply, the effect can actually push prices further out of reach” reuters.com. In short, capital-rich homeowners and landlords benefit most.
Middle East: Sky-High Demand & New Controls
The Gulf’s real estate markets are generally booming, drawing global investor interest. Dubai leads with astonishing figures – 123,000+ home sales YTD (up to end-Q3 2025) and a record Q2 turnover of AED 184.3 billion (≈US$50B, +49% YoY) cbnme.com cbnme.com. The luxury segment is especially hot: branded residences and lifestyle projects (e.g. the new ELIRE by LUX* at Business Bay) are selling rapidly. As one developer notes, their projects aim to “redefine luxury living” with hospitality-grade amenities and services (concierge, private chefs, etc.) cbnme.com. This high-end rush has also buoyed the broader market, with continued strong sales in mid-range segments. Dubai Land Dept. says Q3 is on track for similarly high volumes (over AED 91B by late September). Foreign investors, drawn by yields and Expo/DIFC growth, are pouring into UAE real estate funds and developments.
Saudi Arabia is treading a different path. With rental prices in Riyadh having surged in recent years, the government announced on Sept. 25 a five-year freeze on all rents in the capital cbnme.com. The freeze (covering both residential and commercial leases within city boundaries) prohibits rent increases until 2030, and sets strict rules: vacant units rent at their last lease level, all contracts must be on the official Ejar portal, and renewals happen automatically unless cancelled properly cbnme.com cbnme.com. A new adjudication panel will hear appeals if landlords claim just cause (e.g. after major renovations). Fines up to 12 months’ rent will penalize violators. Officials say these reforms (backed by Crown Prince directives) will restore “long-term stability and fairness” to Riyadh’s market cbnme.com. This move is closely watched; it underscores how some Middle East governments are willing to tightly regulate housing in response to social pressures.
Latin America: Inflation and Social Initiatives
Latin American markets are diverse. Inflation remains a big theme in 2025: Brazil’s consumer prices (IPCA) jumped back to ~5.3% Y/Y by mid-September reuters.com, above the central bank’s 3% target. Housing costs led this pickup (housing up 3.31% in the month) reuters.com. The BCB (Brazil’s central bank) has paused after raising rates to a 20-year high of 15% reuters.com. Pantheon’s Andres Abadia notes the rise is mostly a “base effect,” expecting disinflation to resume by year-end reuters.com. Mexico’s capital is tackling affordability – Mexico City’s mayor just rolled out a program to build 20,000 affordable rental units over six years to counter gentrification and high rents (rent capped at ~30% of income) mexiconewsdaily.com mexiconewsdaily.com. (Data on Latin America is thinner; local sources indicate a focus on social housing and rent relief across the region, though tight credit remains an issue in many countries.)
Regulations & Policies Impacting Real Estate
Governments are actively intervening. We already noted China’s buyer incentives (lower mortgage rates, cut down-payments). Europe has few new central directives, but some countries are exploring taxes: UK politicos are debating “mansion taxes” and scrapping pandemic-era buy-to-let relief, creating uncertainty reuters.com. In the U.S., some analysts worry that new federal tariffs could indirectly slow housing by hurting incomes (Trump’s “tariff chaos” was cited by a CREA economist as a drag on the Canadian rebound aljazeera.com). On the investment side, zoning and building regs are in flux – e.g. France’s new PM just ruled out reinstating a wealth tax, easing pressure on property owners. In Saudi Arabia, the Riyadh rent freeze is the headline; other Gulf states are using visas and foreign ownership rules (e.g. UAE is a CIMB investor visa hub) to shape demand.
Investment Flows and Institutional Trends
Institutional players have been cautious post-2020. Global property funds largely sat on cash in 2024–25. However, mid-2025 saw hints of renewed appetite: in the U.S., H1 office investment rose 42% Y/Y according to industry press (though still low by historical standards). In Asia, government-linked funds in China quietly buy distressed assets. Dubai’s robust data suggests Middle East REITs will outperform. In Europe, many investors remain on the sidelines: roughly 40% of survey respondents on Expo Real (Munich property fair) called themselves optimistic on international markets (vs. 22% pessimistic) – reflecting a cautious wait-and-see stance. Forecasts by major consultancies mirror this mix: analysts see solid housing demand if rates ease (U.S. sales +13% in 2026 reuters.com), but warn that office and retail will lag.
Key Expert Views: Summing up with expert quotes: Santander’s Stephen Stanley cautions that homebuilders need to “bite the bullet” on new starts due to excessive inventory reuters.com. NAR’s Yun predicts future sales growth (4.47M in 2025 to >5M in 2026) but with price gains only “roughly in line with” inflation reuters.com. Zoopla’s Donnell observes that “lower migration and better mortgage availability for first-time buyers are easing… competition for rented homes” in the UK reuters.com. And Australia’s Yardney notes the paradox that interest-rate cuts “are intended to improve affordability, but when they fuel demand in markets with chronic undersupply… prices [get pushed] further out of reach” reuters.com. These insights – along with the data above – paint a nuanced picture: markets around the world are mixed, with housing stress in some countries offset by overheating in others, all under the influence of shifting monetary, fiscal and regulatory policies.
Sources: Latest reports and data from Bloomberg, Reuters, FT, CBC/Al Jazeera, housing ministries, central bank releases, and expert surveys (citations in text) have been compiled to provide this up-to-date global real estate briefing reuters.com reuters.com reuters.com reuters.com reuters.com cbnme.com. Each bullet and section above references these credible sources for transparency and verification.
