Global Real Estate Roundup: Booming Markets, Bold Deals & New Risks (Oct 4–5, 2025)

October 5, 2025
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Global Real Estate Roundup: Booming Markets, Bold Deals & New Risks (Oct 4–5, 2025)
  • Dubai’s property market hit record highs with 59,228 deals in Q3 2025 – the most ever in a quarter rprealtyplus.com – as investors drive up sales by nearly 20% year-on-year.
  • Central banks hold fire on rates: The U.S. Fed and others hint at rate cuts as inflation cools, but a U.S. government shutdown stalled key data needed for decisions realestatenews.com. Mortgage costs remain elevated (~6.7% for 30-year loans), chilling sales.
  • Housing markets diverge: Kenya’s home prices surged 7.8% in a year financialfortunemedia.com, leading globally, while China’s new-home prices keep falling (expected –3.8% in 2025) despite policy support reuters.com reuters.com.
  • Major deals & lawsuits: Rocket Mortgage closed a $14.2 billion purchase of Mr. Cooper (biggest ever independent mortgage deal) realestatenews.com, and five U.S. states sued Zillow and Redfin over an alleged rental listings monopoly reuters.com.
  • Europe’s mixed outlook: UK house prices ticked up 0.5% in September theguardian.com, but high interest rates have hammered commercial assets – L&G merged a £4.7 billion property fund to weather the downturn reuters.com.
  • Latin America strains under high rates: Brazil’s 15% benchmark – highest in decades – makes bonds more attractive than buildings amimarinternational.com amimarinternational.com, while Mexico’s nearshoring boom paused amid U.S. tariff fears amimarinternational.com.
  • Supply chain & construction costs: Builders face “extreme” material prices; new U.S. steel and aluminum tariffs could add 4–10% to home construction costs reuters.com, squeezing margins and delaying projects globally.

Global Trends: Rates, Inflation & Construction Costs

Global real estate is navigating a complex economic backdrop. Interest rates remain high in many markets, but there are signs of a peak. In the U.S., the Federal Reserve has held off further hikes and could even consider rate cuts later in October – although a federal shutdown has delayed the latest jobs report, leaving policymakers “guessing” on the economy realestatenews.com. Mortgage costs are still biting: the average 30-year U.S. mortgage rate sits around 6.7%, versus ~3% two years ago, keeping many buyers and sellers on the sidelines. “Sixty-seven percent of homeowners say they’d rather remodel than move,” noted Angie Hicks of Angi, adding that people now plan to stay put 5 years longer on average to keep low-rate loans reuters.com. This dynamic has froze resale inventory, even as some first-time buyers hope for relief if borrowing costs ease.

Inflation has eased from its peak, but building costs remain stubbornly high. Post-pandemic supply chain kinks and new tariffs are pushing materials prices up again. U.S. homebuilders report “rising costs of construction materials” from lumber to concrete reuters.com. Industry leaders warn that 50% tariffs on steel and aluminum imports could alone add 4–10% to construction costs depending on the project reuters.com. “(These tariffs) may have an additional material impact… perhaps another 4–10% increase in material alone,” said Stuart Siegel of Engel & Völkers reuters.com. Builders are also grappling with labor shortages and wage inflation. The result: slimmer profit margins and delays for new developments worldwide, at a time when housing shortages persist in many countries.

Amid these challenges, one bright spot is the industrial real estate and “powered land” boom driven by tech. Data centers, logistics hubs, and AI computing facilities are fueling a new gold rush for land with electricity. Hines Research estimates 40,000 acres of “powered land” – nearly 2 billion square feet – will be needed globally in the next 5 years to support data center growth hinesprivatewealth.com. Investors are increasingly chasing sites with ready access to the power grid. This trend is especially pronounced in the U.S. and Europe, where cloud computing and AI demand are surging. In effect, real estate development is colliding with the digital economy, as land and infrastructure become as critical as location.

North America: Sluggish Housing, Big Deals & Legal Battles

United States – Residential: America’s housing market remains muted, stuck in a stalemate of low supply and wary demand. With 30-year mortgage rates above 6.5%, existing-home sales have been stuck near record lows, falling for three years straight to just 4.06 million in 2024 (one-third below 2021 levels) reuters.com reuters.com. Homeowners cling to their sub-3% mortgages, resulting in few listings. “Homeowners now plan to stay in their homes five years longer than expected,” said Angi co-founder Angie Hicks, noting that most would rather renovate than sell and lose their low rates reuters.com. This “lock-in” effect has kept inventory tight and prices relatively firm in many regions despite weak volume. New-home builders, meanwhile, face headwinds from both sluggish demand and rising costs – many are offering incentives like rate buydowns on mortgages, but spring sales still turned in the worst season since 2019 reuters.com. High construction costs and tariffs on key materials are adding pressure; homebuilders warn that tariffs on metals could further raise U.S. home prices in coming months reuters.com. On the upside, pending home sales and buyer traffic showed a slight late-summer uptick, hinting that any drop in rates might unlock some pent-up demand.

United States – Commercial: Commercial real estate in the U.S. is in a cautious recovery. Office and retail segments remain under stress from remote work and higher cap rates, but industrial assets (like warehouses) and multifamily rentals are still attracting investment. One major move this week underscored consolidation in property finance: Rocket Companies closed its $14.2 billion acquisition of mortgage lender Mr. Cooper on October 1, “the largest independent mortgage deal in history” realestatenews.com. The deal massively expands Rocket’s market share in home loans at a critical time – mortgage volumes are near multi-decade lows. In tech-driven real estate, data centers and cell tower REITs remain strong as well.

Canada’s housing market similarly faces a high-rate chill. The Bank of Canada’s overnight rate near 5% has pushed Canadian 5-year fixed mortgage rates close to 4% nerdwallet.com, damping home sales after last year’s boom. Policymakers in Ottawa are under pressure to address housing affordability, with big cities like Toronto still seeing sticker-shock prices for first-time buyers.

North America – Policy & Legal: The big real estate headlines also came from courtrooms. In the U.S., five state attorneys-general sued Zillow and Redfin for allegedly colluding on rental listings reuters.com. The lawsuit, filed Oct 1, claims Zillow paid Redfin $100 million to exit the apartment ads business – a deal that state officials say “harms renters and property owners by taking away free market incentives” reuters.com. Virginia’s AG Jason Miyares warned this pact could lead to higher ad prices and fewer choices for the 49 million U.S. renter households reuters.com. Zillow counters that the partnership benefits renters by unifying listings on one platform, but the case will test antitrust limits in online real estate. Separately, a federal judge approved a $50 million settlement in a class-action suit involving landlord software (RealPage), showing regulators’ growing scrutiny of practices that might inflate rents reuters.com.

In Washington, D.C., the government shutdown that began Oct 1 is another overhang. While housing transactions aren’t directly halted, federal housing programs and data releases are in limbo. Economists say a short shutdown would have minimal real estate impact, but a protracted one could undermine consumer confidence and delay economic reports that inform interest rate decisions realestatenews.com. The National Association of Realtors urged a quick resolution, warning of “potential real-life impacts” on everything from mortgage processing (IRS income verifications) to housing market sentiment realestatenews.com.

Europe: Stabilizing Housing Markets Amid Commercial Stress

Residential: Europe’s housing markets are showing signs of stabilization after a volatile year. In the United Kingdom, closely-watched data brought a surprise positive: house prices rose 0.5% in September compared to August theguardian.com, according to Nationwide’s index, lifting the average home to about £272,000. This small monthly gain, after a summer dip, nudged annual price growth to +2.2% theguardian.com. “Broad stability” is returning, said Nationwide’s chief economist, who noted that low unemployment, rising wages, and hopes of interest rate cuts are underpinning buyer confidence theguardian.com. Indeed, the Bank of England left its key rate on hold at 4% last month and is expected to “moderate (rates) a little further” if inflation keeps easing theguardian.com. The prospect of lower borrowing costs by 2026 has many UK buyers and sellers eyeing the Chancellor’s autumn budget and potential tax changes. One wild card: speculation that the government might overhaul property taxes (stamp duty or new levies on £500k+ homes) in the November budget theguardian.com, which is causing some higher-end buyers to wait and see.

Elsewhere in Europe, housing trends are mixed. Germany and Scandinavia have seen prices soften in 2025 after interest rate spikes, whereas France remains relatively resilient with low inventory in Paris. Spain is attracting foreign buyers again (especially Britons and Germans taking advantage of Euro weakness), propping up coastal market prices. Eastern Europe faces unique pressures: Poland and Hungary’s cheap franc mortgages from years past are resetting at higher rates, squeezing owners, while war-related migration has boosted rental demand in places like Poland.

Commercial & Corporate: The story for Europe’s commercial real estate is more sobering, as high borrowing costs and post-COVID shifts hit valuations. Office vacancies are elevated in many cities, retail footfall is recovering slowly, and investors are reassessing strategies. A major development came in the UK fund industry: Legal & General (L&G) merged its £4.7 billion property fund with Federated Hermes’ fund reuters.com. This consolidation, announced August 18, creates one of Britain’s largest real estate portfolios. It was driven by necessity – “commercial property investments have been hammered… by higher borrowing costs and changing working patterns,” Reuters noted reuters.com. Rather than forced sell-offs, the funds opted to combine, aiming for scale and stability. “This merger will expand and strengthen our property portfolio,” said Rob Codling, L&G’s head of real estate funds reuters.com. The UK isn’t alone: across Europe, open-ended property funds have faced redemptions and valuation cuts, prompting some to gate withdrawals or restructure.

Despite challenges, deals are still happening in selective sectors. Hotels and hospitality saw notable transactions in early October. In London, DTZ Investors acquired the Radisson Blu Hotel in Euston (330 rooms plus retail space) for £58 million 4hoteliers.com, buying from Starwood Capital as part of a strategy to invest in long-leased assets. In Spain, Grupo Hotusa – a domestic tourism group – bought a portfolio of nine upscale hotels for €250 million 4hoteliers.com, reflecting confidence in Spain’s travel rebound. Private equity and pension funds remain interested in prime European hotels, logistics warehouses, and specialty assets (like data centers and life-science labs), even as traditional office buildings struggle.

There are also pockets of strength: “Beds and sheds” (multifamily rental and logistics) continue to outperform. Germany has seen global investors target its industrial parks. Italy’s real estate draws on domestic demand; for instance, Milan’s office and residential values have held firm due to limited supply. And Ireland is bucking trends with tech firms expanding campuses in Dublin.

Policy: European governments are stepping in to address housing pain. The EU’s interest rate hikes are essentially done – the ECB’s deposit rate at 4% is expected to plateau, which should gradually relieve mortgage holders across the Eurozone. Some countries are offering relief: France extended caps on rent increases and mortgage rates for first-time buyers, while Ireland is weighing tax breaks for landlords to keep rental supply. Meanwhile, UK regulators are monitoring banks’ mortgage portfolios closely for signs of distress as thousands of fixed-rate loans reset to higher rates this year.

Asia-Pacific: Divergent Fortunes – China’s Slump vs. Resilience Elsewhere

It’s a tale of two trajectories in Asia-Pacific real estate. China continues to grapple with a historic property downturn, while other markets like Singapore, Japan, and parts of Southeast Asia remain relatively robust.

China’s Housing Crisis: The world’s second-largest economy is still searching for a bottom in its housing market. A Reuters poll in September confirmed that China’s new-home prices are expected to fall ~3.8% in 2025 (less of a drop than earlier feared) and another 0.5% in 2026 reuters.com. The declines reflect persistent weakness despite Beijing’s support measures. So far, authorities have rolled out lower down-payment requirements, mortgage rate cuts, and programs to absorb unsold homes and land, but these have “yet to yield significant improvements” reuters.com. Property sales and investment are actually forecast to fall more sharply this year than experts predicted a few months ago reuters.com. Developers like Country Garden and Evergrande remain in distress, and construction of many projects has stalled.

Analysts say more forceful intervention may be needed to turn things around. “Fitch believes the property sector will continue to face many structural challenges… including demographic shifts, low housing affordability and high unsold inventory,” warned Lulu Shi, a director at Fitch Ratings reuters.com. Some are calling for direct government action – such as state-led purchases of unsold units or conversion of empty apartments to social housing – to clear the glut. As one expert, Gao Yuhong, calculated, absorbing 600–700 million m² of unsold inventory (to normalize China’s housing cycle) would require a staggering ¥5 trillion ($699 billion) in funding reuters.com. In short, China’s real estate slump remains a major drag on its economy, with home prices not expected to stabilize until late 2026 or 2027 reuters.com. The government’s recent stimulus (including interest rate cuts and easing of homebuying restrictions in big cities) has improved buyer sentiment slightly, but a rapid rebound seems unlikely.

Japan & Korea: In contrast, Japan’s property market is steady. The Bank of Japan’s ultra-low rates (still negative for short-term yields) continue to support real estate. Tokyo offices and apartments are attracting global investors as a safe haven, and transaction volumes are high. Rents in prime Tokyo have inched upward. Over in South Korea, however, housing costs are a growing concern. In Seoul, the apartment rent index just hit an all-time high mingtiandi.com. Nearly half of Seoul apartment leases now cost over ₩1 million ($700) per month mingtiandi.com. This reflects a broader affordability squeeze: after interest rates rose, many Korean buyers shifted to the “jeonse” system (large lump-sum deposits in lieu of rent), pushing monthly rents up. Complaints are rising as younger Koreans struggle with housing expenses.

Southeast Asia & Australasia: Many Southeast Asian markets are proving resilient. Singapore stands out – its property investment trusts are thriving. In fact, Singapore’s CapitaLand Integrated Commercial Trust (CICT) just overtook Hong Kong’s Link REIT as Asia’s largest REIT after a successful equity raise mingtiandi.com. CICT raised S$600 million (~$466 million) in August, enabling it to acquire the remaining stake in a landmark office complex, and now leads the region by market cap. This highlights how Singapore’s real estate sector remains buoyant, bolstered by its hub status and capital inflows from investors leaving China/HK markets.

Hong Kong, on the other hand, remains in a slump. Property values in the territory have fallen from their peaks, and distressed sales are emerging. One example: veteran investor Lai Wing-to just sold a Mong Kok commercial building at a 40% loss versus what he paid in 2009 mingtiandi.com. Local media report Lai and other once-prolific speculators are liquidating assets – even overseas holdings – as Hong Kong’s high interest rates (pegged to the U.S. dollar) and talent exodus bite. With office vacancies at record highs and retail still recovering from protests and pandemic impacts, Hong Kong’s real estate faces an uphill battle.

Australia is seeing early signs of a commercial rebound. After a two-year slump, institutional investors are tiptoeing back into office markets, betting the worst is over. For instance, global asset manager Barings is in talks to purchase a prime Sydney office tower for A$360 million (~$238 million) mingtiandi.com. This Darling Square deal, if finalized, would mark one of the biggest office transactions in Australia this year. Brokers say Sydney’s Grade A office values have fallen enough to attract opportunistic capital, especially as gateway cities show recovery signs mingtiandi.com. Brisbane has already seen several office blocks change hands to investors looking to catch the market’s low point. Meanwhile, Australia’s residential market is stabilizing; after a brief correction, cities like Brisbane and Perth are rising again, while Sydney/Melbourne remain flat.

India and South Asia: In India, the housing market is buoyant heading into the festive season. Reports indicate luxury home sales jumped 28% this year aurumproptech.in, and developers in Mumbai and Bangalore are launching new high-end projects to meet demand from the newly wealthy tech and finance professionals. However, India’s central bank is cautious – keeping rates steady – to avoid an overheating property market. Elsewhere in South Asia, smaller markets like Pakistan and Bangladesh struggle with high inflation and currency issues, limiting real estate activity.

Middle East: Record Highs in the Gulf & Outbound Investment

Gulf Boom – Dubai Leads: The Middle East’s real estate star is Dubai. The emirate’s property market has been on fire through 2025, and new data shows it shattered records in Q3. Dubai saw 59,228 property transactions worth AED 170.7 billion (~$46 billion) in the third quarter, up 17% in volume and 20% in value from a year prior rprealtyplus.com rprealtyplus.com. This is the highest quarterly transaction count ever for Dubai, pushing total sales for the first nine months of 2025 to nearly AED 500 billion rprealtyplus.com. The boom spans apartments, villas, and even land plots – apartment sales led the surge (49k units sold in Q3) while plot sales jumped ~26% year-on-year rprealtyplus.com. “The Q3 figures underline the lasting strength of the market, and Dubai’s growing appeal … as one of the world’s prime real estate investment hubs,” said Firas Al Msaddi, CEO of fäm Properties rprealtyplus.com. Indeed, Dubai’s property values continue to climb; the median price per square foot rose 11% from last year rprealtyplus.com. Demand is both local and international: affluent buyers from Europe, Asia, and Russia have flocked to Dubai for its safe-haven status, zero income tax, and high-end lifestyle.

One notable trend is the dominance of off-plan sales (new developments). Nearly 73% of Q3 transaction volume in Dubai were for new project sales, as developers roll out attractive payment plans rprealtyplus.com. Luxury segment activity is especially intense – the quarter’s priciest deal was a villa sold for AED 250 million (~$68 million) in Jumeirah rprealtyplus.com. Such trophy sales underscore Dubai’s position as a global luxury hub now rivaling London or New York for ultra-prime homes. The only slight softening was in villa sales volume (down 23% YoY) rprealtyplus.com, possibly due to a supply lull and high prices, but even there prices held firm. Overall, analysts expect momentum to continue into 2026, barring any external shocks, given Dubai’s pro-investor policies and an economy boosted by oil wealth and tourism.

Broader Gulf & Mega-Projects: Other Gulf markets are also buoyant. Saudi Arabia is pushing ahead with its $500 billion NEOM mega-city and various “giga-projects” (The Line, Red Sea resorts), which is spurring real estate and construction domestically. Qatar and Bahrain have seen upticks in housing demand post-pandemic as well. Notably, the UAE introduced a new corporate tax in 2025 (9%), which real estate experts say has prompted investors to restructure holdings. Companies with UAE property assets now must file audited reports and tax returns, leading some to use foundation structures for estate planning moore-global.com moore-global.com. So far, this hasn’t cooled the market, but it marks a significant policy shift in the traditionally tax-free Gulf.

Outbound Investment – Egypt in Focus: The Middle East isn’t just drawing investment – it’s exporting capital too, especially to North Africa. A new Knight Frank report reveals that Gulf investors are pouring money into Egypt’s real estate. About $1.4 billion in private capital from the UAE and Saudi Arabia is targeting Egyptian homes and offices arabianbusiness.com. UAE nationals alone have earmarked over $700 million for property in Egypt, while Saudis plan around $400 million arabianbusiness.com. This wave of Gulf wealth reflects Cairo’s ambitious development agenda: Egypt is building a New Administrative Capital and dozens of new cities. Gulf buyers, many seeking second homes on Egypt’s Mediterranean coast or investment properties in Cairo, are drawn by relatively low prices and high growth potential. As Knight Frank’s head of MENA research Faisal Durrani put it, “Egypt’s metamorphosis into a regional real estate powerhouse is well underway. Private capital from the Gulf… is accelerating the transformation.” arabianbusiness.com

The scale is striking. Gulf sovereign wealth funds have already plowed about $120 billion into Egypt since 2021, including $16 billion just in residential real estate arabianbusiness.com. In 2024, Egypt saw a record $46.6 billion of FDI inflows, and it’s aiming for $12–15 billion more by end of 2025 arabianbusiness.com. Major deals include Abu Dhabi’s ADQ investing $35 billion in February to develop a 170 million m² coastal mega-project (Ras El Hekma) and other infrastructure arabianbusiness.com. Property values in parts of Cairo have spiked – e.g. in Sheikh Zayed City, prices jumped 24.7% year-on-year arabianbusiness.com – although they remain very affordable by Gulf standards (around $2,000/m²). However, a surge in supply is coming: 30,830 new homes are scheduled for delivery in Egypt in 2025 (up 29% from 2024) arabianbusiness.com. Knight Frank cautions that after 2025, fewer completions could create price pressure around 2026–27 due to potential short-term oversupply arabianbusiness.com. For now, though, Middle Eastern capital is helping Egypt build cities at a pace unseen in decades.

Middle East Outlook: The region’s real estate outlook remains positive overall. High oil prices have filled government coffers and individual wallets, leading to robust domestic demand in the Gulf. Hospitality is booming (Dubai’s hotel occupancy is high, and Saudi Arabia is rapidly expanding its hotel capacity for tourism). Retail real estate is also recovering strongly as populations grow and consumer spending rises. Risks include any sharp drop in oil prices or geopolitical tensions that could dent investor confidence. But as of October 2025, the Middle East property market is largely accelerating, fueled by strong fundamentals and strategic investments at home and abroad.

Latin America: High Rates and Policy Shifts Temper Growth

Latin America’s real estate markets are at a crossroads, challenged by sky-high interest rates and economic uncertainties even as select countries see pockets of growth.

Brazil – Braking with 15% Rates: Brazil, the region’s largest economy, is experiencing a harsh real estate financing crunch. To combat inflation, Brazil’s Central Bank has held its benchmark Selic rate at a whopping 15% – the highest in nearly two decades amimarinternational.com. This has made borrowing prohibitively expensive. Government bonds yielding ~13.7% and bank deposits at 12–14% now offer returns higher than typical property yields, as one analysis noted amimarinternational.com. Unsurprisingly, investors are parking money in those risk-free instruments instead of real estate. The effect on commercial property development is stark: many new projects have become “economically unfeasible” except for top-tier opportunities amimarinternational.com. Even though commercial rents in Brazil jumped ~8.5% over the past year, discount rates (hurdle rates) for real estate remain elevated around 14–15%, killing the viability of marginal projects amimarinternational.com. As a result, construction has slowed and funding has dried up for all but the most prime developments.

Brazilian authorities are looking for solutions. Central Bank officials, like Deputy Governor Gabriel Galipolo, acknowledge the strain on the traditional home financing model (where savings account deposits funded mortgages). With savings deposits down, the Bank is exploring “bridge solutions” to new financing models amimarinternational.com. Meanwhile, Brazil’s real estate sector hopes that inflation will finally ease enough to allow rate cuts in 2026. The silver lining: because credit is so tight, Brazil hasn’t seen a U.S.-style housing bubble; if anything, housing supply is constrained, which has kept home prices relatively stable even through economic turmoil.

Mexico – Nearshoring Boom Pauses: Mexico was riding a manufacturing and logistics real estate boom, thanks to companies “nearshoring” operations closer to the U.S. But that trend hit a speed bump due to trade policy jitters. While current U.S. tariffs on Mexican goods are minimal (under 1%), the threat of new tariffs – at one point the U.S. floated up to 25% tariffs – has created a “chilling effect on investment decisions” in Mexican industrial real estate amimarinternational.com. About 70% of companies in Mexican industrial parks had been planning to expand production, yet many have delayed investments amid the uncertainty amimarinternational.com. “We’re seeing a pause – not a cancellation – in investment plans,” observed Sergio Argüelles, CEO of FINSA, a major industrial developer in Mexico amimarinternational.com. This pause is evident in key manufacturing hubs along the border and the Bajío region, where new warehouse leases and factory construction starts have slowed in recent months.

The cooling is also reflected in rental rates: previously tight industrial corridors (Monterrey, Tijuana, etc.) saw record-low vacancies and soaring rents, but now rent growth has flattened, and in some cases rents dipped as companies adopt a wait-and-see stance amimarinternational.com. A broader context is at play too – the IMF recently cut Mexico’s 2025 GDP forecast to a –0.3% contraction amimarinternational.com. Weaker growth prospects, along with fears of U.S.-China “decoupling” reducing Mexico’s advantage, have injected caution. Still, analysts say the nearshoring trend is real and likely to resume once trade tensions clarify, given Mexico’s inherent advantages (proximity to the U.S., skilled labor, and trade agreements). Already, Mexican industrial REITs trade at depressed values – a 15-year low – potentially offering contrarian investors an opportunity amimarinternational.com if and when conditions improve.

Andes & Beyond: Other Latin American markets show a mix of resilience and struggle. Colombia and Chile have seen their central banks start to cut interest rates after conquering inflation, which could gradually boost mortgage lending and home sales into 2026. A report on Chile suggests home sales may rebound 5–10% in 2025 after a 13% drop in 2024 as mortgage access improves and rates decline adventuresincre.com. Peru’s property market is relatively small but stable, though political uncertainty there has overseas investors wary. Argentina, meanwhile, is in a category of its own: with annual inflation over 100% and a volatile peso, real estate there functions as a partial dollar hedge. Buenos Aires apartment prices ticked up in dollar terms for the first time in years (to around $2,300/m² on average) globalpropertyguide.com, as sellers hold out for hard currency. However, Argentina’s market is very thin – transactions plunged amid economic chaos. Many hope that after the October 2025 elections and potential economic reforms, stability will return and unlock pent-up demand.

Affordable Housing & Policy: Across Latin America, a unifying theme is the housing deficit. Millions lack adequate housing, and governments are taking note. In Mexico, the new administration has hinted at housing programs in 2026 to address a shortage of affordable urban homes. Colombia has a well-regarded low-income housing subsidy program (Mi Casa Ya) which it is expanding. Brazil is relaunching its famed “Minha Casa, Minha Vida” program to stimulate homebuilding for low-income families now that fiscal conditions allow some spending. Even in higher-income markets like Uruguay and Costa Rica, policymakers talk of incentives for developers to build affordable units. The challenge is balancing these social needs with tough financial conditions. High interest rates have made mortgage payments onerous: e.g., Brazil’s mortgage rates of 12%+ mean only a small fraction of renters can afford to buy. Until rates drop, policymakers might need to explore creative financing solutions or public-private partnerships to keep housing development moving.

Africa: Soaring Demand Meets Chronic Housing Shortages

Africa’s real estate landscape is characterized by dynamic growth in some markets and deep shortages in others. Rapid urbanization and economic development are boosting demand for property, but high costs and limited financing remain constraints in many countries.

Kenya – A Standout Performer: Kenya’s property market is defying global trends, logging remarkable growth. A new report by HassConsult showed Kenyan home prices jumped 7.8% in the year to June 2025 financialfortunemedia.com – the highest appreciation among a basket of nine major markets worldwide. Over the past 25 years, Nairobi’s housing prices have skyrocketed 425%, far outpacing markets like the US (+201%) or France (+151%) financialfortunemedia.com financialfortunemedia.com. What’s driving this? Robust domestic demand and unique financing habits. “A critical factor in the strength of Kenya’s housing market has been its source of finance,” explained Sakina Hassanali, co-CEO of HassConsult financialfortunemedia.com. Unlike Western countries, fewer than 2% of Kenyan homes are mortgage-financed – most buyers pay cash or use savings financialfortunemedia.com. “Homes in Kenya are fully paid, which makes the market super-resilient,” Hassanali noted financialfortunemedia.com. Because owners aren’t burdened by large debts, Kenya avoids the wave of foreclosures that hit other markets when rates rise or economies dip. Instead, property tends to hold value as people hang onto assets through short-term shocks. Additionally, Kenya’s expanding middle and upper class (from sectors like education, health, trade, and tech) has fueled demand that outstrips overall GDP growth financialfortunemedia.com. Rental yields in Nairobi are also attractive – about 5.5% annual yield, giving a total return (rent + price gain) of over 13% in the past year financialfortunemedia.com, among the best in the world. Even off-plan developments (where buyers purchase before construction) are yielding average ROIs of 18% in 2025 financialfortunemedia.com, thanks to discounts and installment plans that magnify gains.

All this makes Kenya a magnet for real estate investors in Africa. However, the government is mindful of the need for affordable housing too. President Ruto’s administration has continued a push to build hundreds of thousands of low-cost homes, though progress is gradual. The strong market has a downside: Nairobi’s housing is increasingly out of reach for lower-income residents, and informal settlements continue to swell.

Nigeria – Tackling a Housing Crisis: Africa’s most populous nation, Nigeria, exemplifies the continent’s housing deficit. Millions of Nigerians, especially youths, are priced out of homeownership in cities like Lagos and Abuja. The government under President Bola Tinubu (who marked Nigeria’s 65th Independence Day on Oct 1) has declared housing a priority. In early October, Nigeria’s housing ministry launched a “Renewed Hope” homeownership campaign in partnership with private groups housingtvafrica.com. The aim is to raise awareness and implement policy reforms – such as streamlining land titling, providing low-interest mortgages, and incentivizing developers – to make housing more accessible. There is a long road ahead: estimates of Nigeria’s housing shortfall range from 17 to 20 million units. Mortgage penetration is under 1% (very few Nigerians can get home loans due to high interest rates often above 20% and strict lending criteria). Consequently, most housing is self-built or financed informally, leading to a proliferation of substandard homes. Experts warn that Africa’s chronic housing crisis is not just a social issue but a threat to economic stability, as urban overcrowding can stifle productivity and foment unrest. Governments across Africa are increasingly recognizing this connection and seeking solutions.

On a brighter note, Nigeria’s elite continue to invest in real estate, both locally and abroad. In an interesting tidbit, the CEO of Nigeria’s Access Bank just bought a £15 million mansion in London housingtvafrica.com, even as London’s luxury market softens. It’s a reminder that wealth flight and investment overseas remain common, as affluent Africans diversify assets globally – though many are also investing in high-end properties in Lagos, Johannesburg, and Nairobi.

South Africa & Others: South Africa’s property market is relatively mature but subdued. High interest rates (repo rate at 8.25%) and slow growth have cooled activity; home prices are flat in real terms and commercial real estate faces oversupply in offices. However, select segments like logistics and affordable housing see robust demand. In North Africa (besides Egypt which we covered under Middle East), Morocco and Tunisia have had sluggish markets amid political issues, though Morocco’s tourism rebound post-COVID is helping its hospitality real estate. Francophone West Africa (Ivory Coast, Senegal, Ghana) is drawing diaspora investment into new condo and office projects in Abidjan, Dakar, Accra – economic growth there has been solid, and governments are marketing real estate projects to overseas citizens and investors.

Land & Agriculture: A unique aspect in Africa is the real estate of land itself, particularly agricultural land. There’s rising interest in farmland as an asset, both by local entrepreneurs and foreign investors, as global food demand grows. For instance, Uruguay’s farm sector (while not in Africa, it parallels trends) saw wool and sheep farms revival with record wool prices gatewaytosouthamerica-newsblog.com. In Africa, countries like Zambia, Tanzania, and Sudan are seeing Gulf and Asian investors lease large tracts for farming. This can be controversial (“land grabs”) but also is bringing infrastructure to rural areas.

Looking ahead, Africa’s real estate potential is enormous if challenges can be managed. The continent’s population is set to double by 2050, and its cities are among the fastest-growing on Earth. The need for housing, offices, factories, shopping centers – virtually every kind of real estate – is acute. Unlocking that potential will require stable governance, economic reforms to spur middle-class growth, and innovative financing (from micro-mortgages to fintech solutions that let people save and borrow for homes). If those fall into place, Africa could see a real estate boom on a scale comparable to Asia’s in past decades. For now, 2025’s roundup shows isolated bright spots amid persistent challenges: Kenya’s boom coexists with Nigeria’s struggles, reflecting the diverse and evolving tapestry of African real estate.

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Roman Bednarski