- U.S. housing starts plunge: Single-family homebuilding in the U.S. fell 7% in August to the lowest level in 2½ years amid a glut of unsold new homes reuters.com. Top builder Lennar’s quarterly profit sank 46% as high mortgage rates and affordability woes dampened demand reuters.com.
- Permits surge in Europe: German apartment building permits jumped 30% year-on-year in July – a tentative rebound for its beleaguered property sector reuters.com. In the UK, house prices are now forecast to rise more slowly than expected, improving first-time buyer affordability reuters.com.
- Central banks pivot: The U.S. Fed, Bank of Canada and Norway’s central bank all cut interest rates this week while the Bank of England held steady, stoking hopes of relief in financing costs reuters.com. In Japan, the BOJ shocked markets by maintaining rates at 0.5% but moving to sell off its massive ETF and REIT holdings – accelerating the unwind of its stimulus reuters.com.
- Asia’s property strains: China’s Evergrande saga deepened as liquidators were appointed to seize the founder’s assets, after the developer’s collapse under $300 billion in debt reuters.com. Elsewhere in Asia, policymakers signal more support amid slumping home prices reuters.com.
- Middle East opens up: Saudi Arabia approved a landmark law allowing regulated foreign investment in real estate, a major step toward its Vision 2030 goals hoganlovells.com. The UAE projected faster growth (4.9% in 2025) buoyed by non-oil sectors like construction and real estate reuters.com.
- Africa’s housing shake-up: Egypt is phasing out decades-old rent controls over the next 5–7 years, ending ultra-cheap “old rent” contracts and stirring anxiety for millions of tenants reuters.com. Officials promise safety nets, but experts warn the reform “was rushed” and data is lacking reuters.com.
- Latin market resets: Argentina’s new free-market policies, including scrapping rent caps, unleashed a 170% surge in rental listings and slashed rents ~40% from their peaks landlordzone.co.uk – a dramatic reversal of its housing shortage. Elsewhere in Latin America, sky-high interest rates continue to weigh on mortgages and development.
- Commercial real estate under pressure: Office markets struggle globally. U.S. office vacancies hit a record ~20.7% nationwide in Q2 reuters.com (San Francisco’s vacancy leapt to 27.7% reuters.com) as remote work empties buildings. Landlords face rising defaults and a $290 billion refinancing “wall” on the horizon, putting regional banks on edge.
North America: Housing Headwinds and Commercial Woes
Residential slump: In the United States, the housing market flashed new warning signs. Single-family housing starts plunged to their lowest since early 2023, with August starts down 7% amid an inventory bloat of unsold new homes reuters.com. Building permits for future home construction also fell to a 2-year low, pointing to continued weakness. “Builders have been plagued with excessive new home inventories for about 18 months now,” said Stephen Stanley, chief economist at Santander U.S. Capital Markets, noting hopes for a demand rebound have been “repeatedly dashed”. “It is past time that builders bite the bullet and cut back on the number of homes they are starting to get inventories under control,” Stanley advised reuters.com.
Homebuilders’ earnings reflect the pain: Lennar, the nation’s #2 homebuilder, reported a 46% drop in Q3 profit, and cut its home delivery forecast after seeing buyers squeezed by high borrowing costs reuters.com. Elevated 30-year mortgage rates – which briefly eased after recent Fed rate cuts – remain near ~6.3%, almost double pre-pandemic levels, keeping many would-be buyers on the sidelines reuters.com reuters.com. To entice hesitant buyers, builders are resorting to heavy discounts and mortgage rate buydowns, eroding profit margins reuters.com. Affordability is now so strained that U.S. Treasury Secretary Scott Bessent recently hinted the government may declare a national housing emergency reuters.com.
Policy pivots: There is a silver lining on the horizon for North American housing: monetary relief. In the past week, the U.S. Federal Reserve, Canada’s central bank, and Norway’s all delivered interest rate cuts, responding to cooling inflation and weaker growth reuters.com. Lower benchmark rates should gradually filter through to mortgage costs, easing some pressure on homebuyers and developers. The Bank of England, by contrast, held its rate steady at 4.0% on Sept 18 (after 125 bps of cuts since mid-2024) reuters.com. Analysts believe UK borrowing costs have peaked for now – a positive sign for its housing market. “Strong wage growth is helping to narrow the affordability gap, while improvements across the mortgage landscape are sparking greater buyer interest,” observed Marc Von Grundherr of Benham & Reeves estate agency, noting pent-up demand from first-timers now entering the market reuters.com. Still, uncertainty over potential tax hikes in Britain (as the government faces budget holes) and a cooling job market could cap housing gains reuters.com.
Commercial crunch: Meanwhile, commercial real estate – especially offices – remains a source of stress. U.S. office buildings are seeing record-high vacancy. New data show the national office vacancy rate hit 20.7% in Q2 reuters.com, the highest on record and up sharply from pre-COVID times. Tech hubs are hardest hit: San Francisco’s offices are nearly 28% vacant (versus ~9% in 2019) reuters.com. Downtown New York and other major cities aren’t far behind with vacancies in the 20–23% range reuters.com. This “glut of empty space” is “forcing a painful reckoning” for landlords and their lenders reuters.com. With $290 billion in U.S. office loans coming due by 2027, many owners face refinancing at higher rates or even default reuters.com. Smaller regional banks – heavily exposed to commercial mortgages – are tightening credit, and property values (and local tax bases) are eroding. Analysts note a “flight to quality” in leasing: companies that are renting prefer top-tier, amenity-rich buildings to entice employees back on-site reuters.com, leaving older and less fancy offices in an even tougher spot. The retail and industrial real estate segments tell a different story: logistics warehouses remain robust thanks to e-commerce demand, while high-end shopping centers are recovering, but secondary retail and hotel properties face uneven outlooks (with some distressed sales emerging). All told, North America’s real estate market is navigating a tenuous balance – housing showing pockets of resilience amid policy support, but commercial sectors undergoing a difficult reset.
Europe: Brighter Signs Amid Cautious Markets
Stabilization hints: Europe’s property markets saw a mix of cautious optimism and lingering challenges. In Germany, which has been at the epicenter of Europe’s construction slump, new data offered a hopeful spark: building permits for apartments surged 30% in July from a year earlier reuters.com. That jump comes off 2024’s extremely low base (last July’s permits were the weakest since 2009), but it suggests the German construction sector may be steadying after a sharp downturn. Analysts say government support for affordable housing and falling input costs are gradually reviving projects. The apartment permit rebound “shows signs of stabilisation” in Germany’s troubled property industry reuters.com, which had been reeling from a toxic mix of soaring interest rates and developer insolvencies. Likewise, Europe’s construction confidence indexes have ticked up from record lows, though activity remains muted.
UK market cooldown: In the United Kingdom, the housing market appears to be navigating a soft landing rather than a crash. A new Reuters poll of property experts predicts British home prices will rise only ~2.6% in 2025, slower than earlier forecasts reuters.com. This moderation – especially pronounced in formerly red-hot London – is actually welcome news for first-time buyers after years of double-digit price growth. First-time buyer affordability is expected to improve, with 92% of analysts polled saying conditions will get easier for new buyers reuters.com. Several factors are at play: mortgage rates have come off their highs following the Bank of England’s rate cuts in 2024, and lenders are competing harder for borrowers. Simultaneously, wage growth in the UK has been strong, which “is helping to narrow the affordability gap” for those looking to get on the property ladder reuters.com. “Greater buyer interest” is returning as a result, notes Marc Von Grundherr of Benham & Reeves, with some who “sat on the fence” now taking the plunge reuters.com. On the flip side, uncertainty looms over fiscal policy: markets are wary that the government’s autumn budget could include new property or wealth taxes to fill a £20 billion fiscal hole reuters.com. High-end London properties, often magnets for overseas investors, have already felt the chill of such talk – “values will be pressurised accordingly,” warns Russell Quirk of eMoov, citing a political “attack on wealth creators” that may deter luxury buyers reuters.com.
Commercial & retail trends: Across Europe’s commercial real estate landscape, trends remain bifurcated. Office vacancy rates have crept upward in finance hubs like Paris and Frankfurt, though not as dramatically as in the U.S. Still, the shift to hybrid work is prompting major European landlords to repurpose older offices into housing or life-sciences labs. In London, office vacancy is hovering around 8–9%, the highest in a decade, pressuring rents outside prime locations. Retail real estate got a boost from Europe’s robust summer tourism and consumer spending; for instance, UK retail sales rose more than expected in August reuters.com, aiding mall landlords. Yet, e-commerce growth and high energy costs keep smaller retailers under strain. Meanwhile, Europe’s industrial and logistics properties remain a bright spot – demand for warehouses and data centers is strong from manufacturers and tech firms, and investment is flowing into distribution hubs from the Netherlands to Poland.
Overall, Europe’s real estate outlook is cautiously improving in some segments. Easing inflation and the prospect of no further ECB rate hikes have lifted sentiment. However, borrowing costs are still far above their 2021 lows, meaning developers face higher hurdles and transaction volumes are subdued. The coming months will test whether tentative positive signals – like Germany’s permit uptick – can translate into a broader European real estate recovery.
Asia-Pacific: Policy Shifts and Lingering Property Pains
Japan’s policy surprise: All eyes were on Tokyo this week as the Bank of Japan made a pivotal move that could reverberate through real estate and financial markets. The BOJ kept its key interest rate at -0.5%, as expected, but jolted investors by announcing plans to unwind its huge holdings of exchange-traded funds (ETFs) and real-estate investment trusts (REITs) reuters.com. This marks the first step toward scaling back a decade of ultra-loose policy that had propped up asset prices (including property securities). Two BOJ board members even dissented, voting for a rate hike – a sign of hawkish momentum building. “The debate is tilting toward quicker normalisation,” said Charu Chanana, a strategist at Saxo, noting that the surprise asset sale plan is a “structural headwind” for Japanese markets if it continues reuters.com. The Nikkei stock index, which hit record highs earlier in the week, retreated after the BOJ news, and Japanese real estate stocks slid as investors braced for the withdrawal of central bank support reuters.com. Still, some analysts argue the impact on property may be limited if the BOJ sells gradually; much will depend on the pace and signaling of the sales, Chanana added reuters.com. On the ground, Japan’s commercial real estate has been relatively resilient – Grade A office vacancies in Tokyo remain under 5%, and J-REITs had rallied in anticipation of policy easing – but this latest BOJ move introduces fresh uncertainty for 2026.
China’s property struggle: In China, the news is dominated by continuing turmoil in its gigantic real estate sector. The country’s once-mighty developers are in various stages of distress, and this week brought a new twist in the Evergrande saga. A Hong Kong court appointed receivers to seize assets of Evergrande’s elusive founder, Hui Ka Yan reuters.com. Hui, who was detained by authorities last year, presided over Evergrande’s rise and spectacular fall – the firm defaulted in 2021 and is now the poster child of China’s property crisis with over $300 billion in liabilities reuters.com. Liquidators are trying to claw back $6 billion in allegedly diverted funds and dividends from Hui and ex-executives reuters.com. The development underscores Beijing’s tougher stance on corporate malfeasance amid the property meltdown. It also highlights the broader troubles: property sales and prices in China remain weak, despite a flurry of policy support (rate cuts, lower down payments, and local relaxations of homebuying curbs). Official data show new home prices have fallen for several months straight, prompting calls for “more policy support” to stabilize the market reuters.com. The government this week rolled out modest additional measures – for example, some cities further eased mortgage rules for second-home buyers – but so far, the response has been lukewarm. Homebuyer sentiment is shaky due to economic uncertainty and developers’ debt woes. Some positive news: Chinese authorities indicated they will extend financing to ensure unfinished housing projects (left idle by bankrupt developers) get completed, a move to restore buyer confidence. Also, real estate investment in China, while down nearly 13% year-on-year gmk.center, is expected to decline more slowly in 2025 than previously feared reuters.com. Investors are watching if Beijing will take more forceful action (such as directly bailing out certain developers or injecting capital into banks) to “halt the downward spiral” in property – a phrasing used in state media recently.
Other Asia-Pacific developments: Elsewhere in the region, India saw a continued boom in its commercial real estate – global firms are expanding office footprints in cities like Bengaluru and Hyderabad, even as some U.S. multinationals slow new leases. Australia’s housing market, which rebounded in early 2025, faces a test from the Reserve Bank’s recent rate hikes (the RBA held rates steady this week amid signs of cooling inflation). Sydney and Melbourne home prices are slightly off their peaks, and auction clearance rates have dipped, suggesting higher mortgage costs are biting. In Southeast Asia, markets remain broadly upbeat: Vietnam and Indonesia report strong foreign investment inflows into manufacturing and logistics properties, thanks in part to China+1 diversification strategies. And in Singapore, government figures on Sept 18 showed property sales rebounding 8% in August after authorities tweaked some cooling measures. Across Asia-Pacific, the real estate picture is mixed – with policy changes (like Japan’s and China’s) grabbing headlines – but underlying demand for quality assets (from data centers to prime residential) is keeping investors engaged in the region.
Middle East: Investment Flows and New Opportunities
Gulf real estate heats up: The Middle East’s property markets remain on an upswing, fueled by economic growth and strategic reforms. In a significant policy shift, Saudi Arabia has opened its real estate sector to foreign investors under a new law approved this quarter – a move described as “a major step toward Vision 2030” and a new era for global capital flowing into the kingdom hoganlovells.com. The law, which updates decades-old restrictions, will allow non-Saudis (residents, companies, even diplomatic entities) to own and invest in property under regulated conditions hoganlovells.com hoganlovells.com. Certain sensitive areas (like the holy cities of Mecca and Medina) remain off-limits for outright foreign ownership, but long-term lease rights will be possible hoganlovells.com. The Real Estate General Authority in Saudi is rolling out the details, with expectations that this reform will attract foreign capital to mega-projects (think NEOM city and Red Sea resorts) and improve market transparency. Investors from the GCC, China, and Europe are already eyeing opportunities – from Riyadh office towers to Jeddah’s housing developments – now that Saudi Arabia’s once-closed property market is more accessible.
Economic momentum: The region’s robust economy is underpinning real estate. The United Arab Emirates expects GDP growth to accelerate to 4.9% in 2025, up from an earlier 4.4% forecast reuters.com, thanks in part to higher oil output but importantly “strong growth in the non-hydrocarbon sector,” per the UAE central bank reuters.com. Crucially, non-oil GDP (77% of the economy) is projected to expand ~4.5% next year, led by investment, government spending, and rising confidence reuters.com. Sectors like construction and real estate are major contributors – the UAE’s Q1 data showed real estate activity up over 5%, helping drive a 3.9% overall growth reuters.com. Dubai’s property market, in particular, remains red-hot. Realtors report that residential sales in Dubai are headed for another record year in 2025, with luxury villas and waterfront properties seeing double-digit price gains amid an influx of foreign buyers (from wealthy Europeans to Russian and Chinese investors seeking safe havens). Even office space in Dubai is experiencing a revival: prime office rents have climbed as multinational firms expand regional operations, and the emirate’s commercial occupancy is at its highest since 2014.
Across the region: Other Middle Eastern markets also saw notable developments in the last 48 hours. Qatar reported a spike in real estate sales in early September, with 394 million Qatari riyals (~$108m) in deals closed in just one week arabnews.pk – a sign of post-World Cup economic activity carrying over. In Egypt (often grouped with the Middle East-North Africa region), the government’s bold decision to end old rent controls (discussed more in the Africa section) is aimed at spurring private investment in housing and urban renewal in cities like Cairo. Meanwhile, the Israeli property market faces headwinds from political uncertainty and high interest rates, with home sales volume down sharply year-on-year; the central bank there held rates steady this week, balancing inflation fighting with concern about housing affordability. And Turkey continues to grapple with 50%+ inflation that is distorting its real estate market – many new construction projects are on hold as costs soar, even as property prices in Istanbul climb (often pegged to the U.S. dollar to hedge inflation).
Overall, the Middle East’s real estate scene is characterized by high investor appetite – both regional and international – and government initiatives to modernize and attract capital. From Saudi Arabia’s legal overhaul to the UAE’s diversification drive, the region is positioning property as a key engine of growth and a magnet for foreign investment.
Africa: Reforms and Challenges in Housing
Rent control revolution in Egypt: A historic change is underway in Egypt, where authorities have enacted the biggest shake-up of rental housing rules in decades. This July, Egypt’s parliament approved ending the old rent cap system that for generations kept rents frozen at token levels for many urban tenants reuters.com. Under the new law, rent caps will be phased out – for commercial properties over 5 years and for residential units over 7 years reuters.com – finally phasing out leases where some families paid only a few Egyptian pounds a month (pennies in USD terms) for centrally located apartments. The policy aims to correct a market distortion that left 5.6 million housing units unused or under-maintained even amid a housing shortage egyptianstreets.com. Landlords will regain the right to charge market rates once the transition period ends, which proponents say will unlock supply, encourage maintenance, and boost investment in housing. However, the human impact is significant: millions of longtime renters face steep increases or eviction in coming years. “I’m afraid all the time… after all this familiarity, I would just leave?” said one elderly Cairo tenant of 50+ years reuters.com. The government insists it is bolstering the safety net – it has pledged to rehouse eligible low-income tenants in new subsidized units before the law fully takes effect reuters.com. In late August, the cabinet approved rules to allocate social housing flats or offer rent-to-own options for those displaced reuters.com. Still, urban activists worry about gentrification and social upheaval. “(The law) was rushed… We don’t know the exact numbers,” cautioned May Qabeel of the Egyptian Initiative for Personal Rights, questioning if the policy was properly studied in the rush to meet a court mandate reuters.com. As rents start rising – they’ll increase 10x to 20x in some areas during the transition reuters.com – Egypt’s cities could see significant demographic shifts, with more people relocating to cheaper suburbs. All eyes are on the implementation to see if promised support materializes to prevent a crisis of homelessness.
Housing and economy: Across Sub-Saharan Africa, housing markets present a mosaic of opportunities and struggles. Many nations are dealing with rapid urbanization that fuels demand for homes, but also high costs and limited financing options. In South Africa, for instance, the residential market remains sluggish amid economic headwinds – high unemployment and interest rates at 25-year highs (prime ~11%) have dampened home sales globalpropertyguide.com. The South African Reserve Bank kept rates unchanged at its September meeting privateproperty.co.za, prioritizing inflation control, but developers are lobbying for rate cuts to stimulate property activity. Nonetheless, pockets of South Africa’s market are active: there’s growing demand for affordable housing (43% of new home loans are for houses under R1 million) betterbond.co.za, and the luxury segment saw a slight uptick as some well-off buyers take advantage of price dips. Nigeria, Africa’s largest economy, continues to face a massive housing deficit (estimated 20 million units). The new government has declared housing a priority and is courting foreign investors for its ambitious plan to build 1 million affordable homes annually – but currency instability and high construction costs pose challenges. In Kenya, the president’s controversial housing levy (a proposed tax to fund affordable housing) sparked protests earlier in 2025, reflecting public impatience for solutions to overcrowding in Nairobi’s informal settlements. On a positive note, Morocco and Rwanda are emerging as bright spots: Morocco’s tourism rebound has spurred investment in hotels and vacation properties, and Rwanda’s orderly urban planning is attracting real estate funds to Kigali.
African real estate also saw a notable cross-border deal recently: a consortium of Gulf investors agreed to invest $500 million in Egyptian commercial real estate, targeting office and retail properties at distressed prices given Egypt’s currency woes. Such investment underscores that despite short-term difficulties, global capital sees long-term value in Africa’s urban growth. The coming year will test how reforms – like Egypt’s rent law – and economic trends translate into on-the-ground changes for housing and development across the continent.
Latin America: Market Resets and Policy Experiments
Argentina’s grand experiment: In Latin America, Argentina stands out for its radical shift in housing policy – and the early results of that shift are dramatic. Following the election of libertarian President Javier Milei, Argentina scrapped its rent control law (enacted in 2020) as part of a broader free-market overhaul. In the nine months since, the country’s rental market has flipped from famine to feast. Rental supply in Buenos Aires has exploded – up 170% – as thousands of units returned to the market that were previously kept off due to price caps landlordzone.co.uk landlordzone.co.uk. This surge in available apartments has actually begun to drive asking rents down; many listings are now 20–40% cheaper (in USD terms) than a year ago landlordzone.co.uk, when rigid controls had caused landlords to withdraw properties and rents to skyrocket on the few available. “The result has been a rapid turnaround… one large and grateful group – tenants,” a local real estate observer noted, as Argentina’s renters finally see more choices and cooling prices landlordzone.co.uk. However, this comes after a period of pain – and Argentina’s broader economic context is severe, with inflation over 100% and real incomes eroded. While the housing shortage is easing in the rental market, homeownership remains out of reach for many as mortgage credit is virtually non-existent in an environment of 115% central bank rates. Milei’s reforms (from dollarizing the economy to slashing subsidies) are a bold gamble that extend beyond housing, and the world is watching to see if free-market policies truly cure Argentina’s long-standing property woes or create new dislocations.
Markets in flux: Elsewhere in Latin America, real estate trends are largely tied to macroeconomic shifts. Several major economies are now easing monetary policy after a cycle of aggressive rate hikes. Brazil’s central bank cut rates in August (the start of an expected easing cycle from 13.75% earlier this year), and though it held at 12.75% in September, further cuts are anticipated into 2026 as inflation cools. This should gradually revive Brazil’s housing market, where mortgage rates above 10% had curbed a nascent boom. Brazilian developers report that buyer inquiries have already ticked up in São Paulo for mid-market condos, anticipating cheaper financing. Mexico, which kept rates at a record 11.25% through mid-2025, is likewise hoping to see borrowing costs fall by year-end. Mexico’s residential market has been steady, but the real action is in industrial real estate: Mexico is riding a nearshoring wave as manufacturers open factories to serve U.S. markets. Northern Mexican cities like Monterrey and Tijuana are seeing industrial park occupancy near full capacity, and industrial rents have climbed, attracting significant foreign investment into logistics facilities. Some analysts warn of a short-term imbalance – one report noted industrial warehouse absorption slowed in Q3 mexiconewsdaily.com – suggesting that even hot markets can pause if costs get too high or infrastructure lags.
In Chile and Colombia, housing activity remains subdued; both countries face lingering high interest rates and, in Colombia’s case, a hangover from pandemic-era building booms that led to oversupply. Peru is an outlier with a more resilient market – low interest rates (comparatively) and Lima’s stable demand have kept prices inching upward even amid political upheaval. Meanwhile, Panama is quietly becoming a real estate hotspot again, with foreign buyers (especially North Americans) snapping up beachfront and urban properties, taking advantage of Panama’s strong dollarized economy and residency incentives.
Policy trends: Latin American governments are experimenting with different approaches to housing challenges. On one end, Argentina and Brazil (under Milei and to some extent under market-friendly President Lula) lean toward free-market solutions like deregulation or incentives for private builders. On the other, countries like Mexico and Colombia are considering more interventionist ideas – e.g. Mexico’s capital has debated rent control to combat soaring rents for locals as digital nomads flood Mexico City, though no law has passed yet. And Bolivia just launched a unique program offering 30-year mortgages at 3% fixed interest (massively subsidized) to lower-income buyers, aiming to boost homeownership. The effectiveness of these varied policies will become clearer over time.
One takeaway from the past 48 hours of news: Latin America’s real estate landscape is highly dynamic, with economic swings and policy shifts leading to rapid changes. Investors and residents alike are adjusting to a new normal – whether it’s Argentina’s liberated rental market, Brazil’s turning interest-rate tide, or Mexico’s manufacturing-fueled property demand – making the region one to watch in global real estate.
Sources: Key information has been drawn from Reuters reporting and official data releases between Sept 18–19, 2025, and related analysis. reuters.com reuters.com reuters.com reuters.com reuters.com reuters.com hoganlovells.com reuters.com reuters.com reuters.com landlordzone.co.uk reuters.com reuters.com
