- North America: U.S. housing is stagnating under high rates – prices up only ~2% year-on-year, trailing inflation investopedia.com. Analysts warn real home equity is eroding, with “American housing wealth… declined in inflation-adjusted terms” investopedia.com. Big money is still betting on real estate: Carlyle raised a record $9 billion fund to target residential, industrial and self-storage assets while shunning distressed offices reuters.com reuters.com.
- Europe: Commercial property remains in “zombieland” amid decade-low deal volumes reuters.com reuters.com. An investor exodus and seller reluctance to cut prices have stalled any recovery. “We have ‘zombieland’… no recovery, stranded assets, no liquidity,” says PGIM’s European real estate head reuters.com. Hard-hit offices and malls languish, though rental housing and logistics still draw interest.
- Asia: China’s property downturn is deepening – developers warn of plunging sales and mounting losses reuters.com reuters.com. Country Garden, once China’s top builder, delivered half as many homes as last year and expects a ¥18–21 billion first-half loss reuters.com reuters.com. The broader economy is feeling the pain: mortgage demand hit a 20-year low as households avoid new loans reuters.com. Elsewhere in Asia, Japan’s real estate is attracting global investors – bidding wars loom for Sapporo Holdings’ ¥400 billion ($2.7 billion) property portfolio reuters.com as foreign funds like Bain and KKR hunt bargains in a low-rate market reuters.com.
- Latin America: After punishing rate hikes, some relief is in sight. Brazil’s central bank signaled its 15% benchmark rate – a two-decade high – is “more restrictive than necessary”, hinting at earlier cuts reuters.com reuters.com. Chile and others have already begun easing policy, aiming to rekindle property demand. Meanwhile, Mexico’s industrial real estate is booming thanks to nearshoring: factory and warehouse investments are surging as companies relocate closer to the U.S. (despite jitters over U.S. trade policy noise).
- Middle East: A tale of two booms – corporate profits and construction. Dubai’s property frenzy sent Emaar Properties profits +33% in H1 as premium projects and investor-friendly reforms lure global buyers reuters.com reuters.com. Saudi Arabia launched landmark housing reforms: in August it rolled out a new “White Land” tax of up to 10% annually on large undeveloped land parcels to crack down on speculation topluxuryproperty.com topluxuryproperty.com. It’s now much costlier to sit on empty plots – a change that “makes it significantly more costly for owners to hold assets without putting them to productive use,” notes DLA Piper’s Nils Vanhassel topluxuryproperty.com. The kingdom also approved a law to let foreigners buy homes in Riyadh, Jeddah and other zones from 2026, a seismic policy shift to draw investment gfmag.com gfmag.com.
- Africa: High interest rates have capped real estate growth, but momentum is turning. South Africa just cut its repo rate to 7.00% (prime lending now 10.5%) – the lowest since 2022 privateproperty.co.za – offering modest relief to borrowers. “Financial pressure on households will ease slightly,” says Yael Geffen of Sotheby’s Realty, though she warns South Africa is “on the precipice of an economic disaster” with record unemployment and families spending 2/3 of their income on debt privateproperty.co.za. Elsewhere, pan-African investment is stirring: Nigeria’s Dangote Group announced plans to expand into Ethiopian real estate (alongside a $2.5 billion industrial venture), underlining rising intra-African capital flow into property facebook.com.
- Oceania: Australia’s housing market has flipped back to growth – every capital city saw prices rise through July, with national home values up ~1.8% for the month cotality.com. Tight supply and robust immigration are fueling a modest rebound, and analysts forecast continued gradual gains amid expectations of rate cuts propertyupdate.com.au. New Zealand, however, is still nursing a downturn: average home values are 13% below their late-2021 peak qv.co.nz qv.co.nz, with Wellington City down ~27% from the top qv.co.nz. While the slide is bottoming out – values nationally are flat versus a year ago qv.co.nz – the Kiwi market remains fragile. Agents report an “uneven and fragile” recovery, as sellers in many areas must “meet the market” on price to close deals qv.co.nz.
North America: High Rates Hit Home
Housing cooldown: U.S. residential real estate is grappling with the bite of high interest rates. The average 30-year mortgage remains around 6.7%, the highest in over two decades, drastically curbing affordability investopedia.com. Fresh data show home prices inching up only ~1.9% annually (as of June) – far below the 2.7% inflation rate investopedia.com. In effect, real home values are falling for the first time in years. “For the first time in years, home prices are failing to keep pace with broader inflation… American housing wealth has actually declined in inflation-adjusted terms,” noted Nicholas Godec of S&P Dow Jones Indices investopedia.com. This marks a stark reversal from the pandemic boom, when double-digit annual price gains were the norm.
Inventory and demand: Unlike 2021’s buying frenzy, today’s market is well-stocked. New construction has piled up a 9.2-month supply of new homes for sale – near an all-time high investopedia.com – as builders finish projects but buyers pull back. Existing home listings are also on the rise (4.6 months’ supply vs. 4.0 a year ago) investopedia.com. This growing inventory, especially in formerly hot Sun Belt markets, is putting downward pressure on prices. Case-Shiller Index data confirm price declines in some boomtowns: e.g. Tampa is down 2.4% year-on-year, San Francisco -2.0%, reflecting oversupply in those regions investopedia.com. By contrast, the Northeast and Midwest remain relatively strong – New York City prices are +7% year-on-year, Chicago +6%, buoyed by tighter supply investopedia.com.
Outlook and policy: The U.S. Federal Reserve’s rapid rate hikes have led to a collapse in mortgage activity – applications recently hit a 28-year low reuters.com – yet housing hasn’t crashed outright. Prices nationally have dipped less than 3% from their 2022 peak reuters.com, defying predictions of a bigger correction. Analysts now think the worst is over: “the worst of the correction appears to have passed and we don’t expect further sustained declines,” says Andrew Burrell, chief property economist at Capital Economics reuters.com. The consensus is for price stagnation in 2024, even if the Fed starts cutting rates, as any renewed demand may be balanced by more sellers coming off the sidelines reuters.com. One persistent drag is affordability for first-time buyers – even if home prices stop rising, mortgage rates near 7% mean monthly payments remain onerous. About half of property experts polled say first-time buyer affordability will worsen in the coming year, despite flat prices reuters.com.
Canada & cross-border flows: In Canada, a parallel cooldown is underway. Major markets like Toronto and Vancouver are seeing slower sales and modest price drops as 5–6% mortgage rates strain buyers. Nonetheless, North America continues to attract global real estate capital. Notably, Latin American investors are increasingly active in U.S. property: nearly half of new Miami condo sales this year are to Latin American buyers, who view U.S. real estate as a safe haven amid political and economic uncertainty back home miamiherald.com. This international demand is providing pockets of strength even as domestic buyers shy away.
Big deals and REITs: Despite a tough environment, some high-profile real estate deals and moves made headlines:
- Carlyle’s $9B Property Fund: Private equity giant Carlyle Group closed a $9 billion U.S. real estate fund – its largest ever reuters.com – signaling that institutional investors still see opportunity in select sectors. “Investors committed money during “one of the most difficult fundraising environments… in recent memory,” said Rob Stuckey, Carlyle’s U.S. real estate head reuters.com. The fund is deliberately avoiding offices, hotels and malls, focusing instead on residential, warehouses, and self-storage where “fundamentals are improving” reuters.com. Stuckey noted the lack of buyers in today’s market actually gives well-funded players an edge in negotiating deals reuters.com.
- REIT rebounds?: U.S. Real Estate Investment Trusts had a volatile week. The FTSE Nareit All-REIT index was flat over the Aug 30–31 period after a summer rally cooled. Industrial/logistics REITs continue to outperform thanks to e-commerce demand, while Office REITs remain deep in bear territory with high vacancy and looming debt maturities. In corporate news, Blackstone’s BREIT (non-traded REIT) reported a surge in redemption requests in August as retail investors seek liquidity, prompting the fund to again gate withdrawals – a sign of lingering investor caution in the commercial real estate space reuters.com.
- Notable transactions: No mega-mergers hit the wires on Aug 30–31, but some regional deals popped up. In New York, Brookfield reportedly restarted talks to sell a partial stake in One Manhattan West office tower at a steep discount, testing investor appetite for prime offices. And in Silicon Valley, Google completed the $300 million sale-leaseback of an office campus to a private equity buyer – part of its ongoing real estate consolidation amid hybrid-work trends (sources say Google is offloading ~$1.5 billion in office assets this year to cut costs).
Expert view: Economists are divided on North America’s trajectory. Optimists point to solid U.S. job growth and pent-up millennial demand that could re-energize housing if mortgage rates ease even slightly. Pessimists argue that “higher for longer” interest rates will keep housing unaffordable for many, pressing prices gently downward in real terms. Bank of America’s latest survey found U.S. consumers the most pessimistic on housing since 2023, with a majority expecting prices to either stagnate or fall as borrowing costs and economic uncertainty deter buyers reuters.com. The fate of the market may rest on the Federal Reserve’s next moves – a quicker pivot to rate cuts in 2024 could spark a mild rebound, whereas any persistence of 7%+ mortgage rates into next year risks a further grind-down in prices and construction activity.
Europe: Stuck in ‘Zombieland’ but Pockets of Hope
Commercial real estate slump: Europe’s property markets, especially commercial sectors, are slogging through an extended downturn. Transaction volumes have plunged to near-decade lows as high financing costs and economic jitters sideline investors. In the first quarter of 2025, commercial property sales across Europe totaled just €47.8 billion – less than half the level of early 2022 reuters.com. Cross-border investment has dried up: Q2 saw a 20% year-on-year drop in EMEA inbound property investment, the worst April–June in ten years according to Knight Frank data reuters.com. Would-be buyers are demanding steep discounts, but many sellers (often well-capitalized or in “extend-and-pretend” mode with lenders) are refusing to budge on price, leading to a stalemate.
‘Zombieland’ market: The mood is markedly different from the start of 2025, when some optimistically predicted a post-pandemic rebound. Instead, “We have ‘zombieland’… no recovery, stranded assets, no liquidity coming back,” laments Sebastiano Ferrante, head of European real estate at PGIM reuters.com. He notes that even opportunistic investors are cautious given the unclear outlook. Distress is starting to surface: some banks and funds are beginning to offload or restructure troubled assets rather than extending loans endlessly reuters.com. For example, Canada’s Brookfield sought to restructure a bond on its London CityPoint tower after pulling a sale when bids came in far below book value reuters.com. And in Germany, the iconic Trianon skyscraper in Frankfurt – whose owner defaulted – has been put up for sale by an administrator, a rare test of price discovery in that fragile market reuters.com.
Sector divergence: The pain is not evenly spread:
- Office & retail: Out-of-favor segments like secondary offices and old shopping malls are virtually illiquid – few buyers will touch them even at sharp discounts reuters.com. Office vacancy rates are at or near record highs in financial hubs like Frankfurt, London, and Amsterdam as hybrid work sticks. Retail real estate faces headwinds from e-commerce and weak consumer spending; many secondary shopping centers are “stranded assets” seeking repurposing.
- Residential & logistics: Bright spots remain in multi-family residential, where Europe’s housing shortage keeps investor interest high (underscored by recent deals in Germany and the Netherlands for rental housing portfolios). Modern logistics warehouses also still find bidders thanks to the e-commerce boom, though even that sector has cooled from 2021 heights. As Ferrante notes, “logistics and hotels [present] buying opportunities” even as other categories struggle reuters.com. Indeed, some private equity firms are quietly accumulating warehouse assets in anticipation of an eventual rebound in demand.
- Hotels: The hospitality sector is recovering with tourism’s bounce-back. In top destinations (Paris, Rome, Dubai) hotel occupancies and room rates are up, spurring interest in high-end hotel acquisitions. However, rising cap rates mean buyers are still cautious, and some planned hotel sales have been shelved.
Investor sentiment & financing: Investor sentiment in Europe is at its weakest in over a year reuters.com, mirroring the U.S. where confidence also soured in 2025. According to INREV (the European Association for Investors in Non-Listed Real Estate Vehicles), investor confidence index readings for mid-2025 hit multi-year lows reuters.com. A major factor is financing costs: with the ECB rates around multi-year highs, real estate yields have not yet adjusted enough to entice buyers. Many deals simply don’t pencil out when debt financing can exceed 5% but prime office yields are still only ~4% in cities like Paris or Munich. Until this yield gap resolves (either via lower interest rates or lower asset prices), transaction activity may remain muted.
Policy and regulations: European governments are juggling housing affordability crises and financial stability:
- Rent control & housing policy: Several countries are grappling with how to cool rents and boost housing supply. In Berlin, a new rule capping rent increases took effect this summer, aiming to ease the burden on tenants (though critics argue it will deter investment in new housing). The U.K. is debating reforms to its rental regulations and planning rules as housing affordability becomes a political flashpoint ahead of 2026 elections. Meanwhile, the EU as a whole faces what Barcelona’s mayor called “the housing crisis [being] now as big a threat to the EU as Russia”, underscoring the urgency for solutions theguardian.com.
- Green building push: Sustainability rules are also influencing real estate. The EU’s proposed Energy Performance Directive could force costly upgrades to inefficient older buildings by 2030, pressuring owners of aging offices and apartments. This is expected to accelerate the obsolescence of non-green buildings (a factor in the “stranded assets” issue) and channel investment into refurbishments and green developments.
Signs of life: Despite the gloom, some opportunistic moves and positive indicators emerged:
- Distressed deals: A few brave investors are bottom-fishing. London saw private equity bids for several distressed office assets at 30–40% discounts to pre-pandemic valuations. In Sweden, which had one of the sharpest property downturns, domestic institutions have started quietly accumulating high-quality commercial properties from overstretched landlords at bargain prices. These early moves could set the stage for a broader recovery if financing improves.
- Market adjustments: In parts of the market, recovery is underway. Cecile Retaureau of Phoenix Group notes, “in some parts of the market the recovery is well under way… however there are out-of-favour assets where there is almost no liquidity and more pain to come.” reuters.com This suggests well-located, future-proof assets (think: prime offices with high ESG ratings, new logistics centers, affordable housing projects) are finding a floor, even as older and leveraged assets struggle.
- Interest rate outlook: The path of interest rates will be crucial. With Eurozone inflation finally trending down (just above 3% recently), many expect the European Central Bank to start cutting rates in 2026, if not sooner. Any clear signal of rate relief could be a turning point, bringing yield requirements down and buyers back. Until then, Europe’s real estate may remain a tale of two markets – a nascent recovery for the best assets and a continuing slump for the rest.
Asia: China’s Crisis, Japan’s Opportunity
China – Crisis and stimulus: China’s once-mighty real estate sector continues to grapple with an unprecedented downturn. Property developers are in distress, new home sales are plunging, and homebuyer confidence is shattered. Country Garden, which in years past sold more homes than any developer globally, warned on Aug 22 of a massive first-half loss as its housing project deliveries fell 50% from last year reuters.com reuters.com. The company defaulted on offshore bonds in late 2023, and its woes epitomize the “sector-wide crisis” that has already felled giants like Evergrande reuters.com. As developers halt projects and scramble to restructure debt, homebuyers are holding back – presales have dried up and some buyers refuse to pay mortgages on unfinished units in protest.
Beijing is responding with a flurry of support measures to arrest the slide:
- In late August, Chinese regulators cut mortgage down payment requirements in major cities. For first-time buyers in big cities like Beijing and Shanghai, minimum down payments were reportedly lowered from 30% to 20%, and for second homes from 60–70% down to ~30–40%. This is aimed at stimulating demand by lowering upfront costs.
- The People’s Bank of China trimmed key interest rates (the 1-year Loan Prime Rate was cut earlier in August) and instructed banks to reduce existing mortgage rates for eligible borrowers. Many Chinese homeowners who borrowed at 5%+ rates during the boom may see their loan rates reset lower to boost disposable income and housing affordability.
- Cities are dismantling earlier cooling measures: Several municipalities eased home purchase restrictions (for example, by allowing non-residents to buy or by lifting caps on buying multiple properties). The mega-city of Guangzhou, on Sept 1, reportedly removed all curbs on home purchases. Other cities are offering subsidies and tax breaks to homebuyers.
Despite these efforts, the data remain grim. New home prices have fallen for over a year; in July, prices were down 2.8% year-on-year, though the decline did ease from June’s 3.2% drop tradingeconomics.com. Real estate investment is contracting by double digits. Perhaps most worryingly, households are reluctant to borrow – July saw the first net decline in outstanding bank mortgages in 20 years reuters.com, highlighting a crisis of confidence. As Pinpoint Asset Management’s Chief Economist Zhiwei Zhang observed, “China’s economic momentum has slowed in Q3 due to persistently weak domestic demand and a cooling property market.” reuters.com If the property slump isn’t arrested, it threatens Beijing’s GDP growth target (~5% for 2025) by crimping consumer spending (since housing wealth is a major driver of Chinese consumption) reuters.com reuters.com.
Broader Asia Pacific: Outside China, other Asian real estate markets present a mixed picture:
- Japan – Hot Property: Japan is emerging as a surprise investment hotspot. With ultralow interest rates (the Bank of Japan is still at negative/0% policy rates) and an economy finally shaking off deflation, global investors are piling into Japanese real estate. One headline example: Sapporo Holdings is selling its real estate business (including a prized portfolio of breweries, offices, and hotels), and at least three major foreign-led groups are preparing bids around ¥400 billion ($2.7 billion) reuters.com. U.S. private equity firms Bain Capital and KKR are leading consortia eyeing the assets reuters.com. Real estate has become a “popular target for investors in Japan as the country emerges from deflation and interest rates are low” reuters.com. Beyond this deal, Japan’s overall property investment in 2025 is robust – J-REITs (Japanese REITs) are trading up, and rental housing, logistics, and even suburban retail centers are seeing increased demand. The only caution: if the BOJ were to tighten policy or if the yen fluctuates wildly, it could temper foreign enthusiasm. But for now, Japan’s stable cap rates and cheap financing make it a rare sweet spot globally.
- India – Reforms and growth: India’s real estate market is benefiting from a strong economy (Q2 GDP +7.8% hindustantimes.com) and government reforms. On Aug 30, India’s Housing and Urban Affairs Minister, Hardeep Singh Puri, sharply criticized the slow resolution of stalled housing projects under the country’s bankruptcy system (NCLT) and called for urgent reforms hindustantimes.com hindustantimes.com. Speaking at a real estate convention, he noted that if a delayed project gets dragged into NCLT, “it is certain that it will never be completed” hindustantimes.com – a blunt assessment of the need to overhaul how developer insolvencies are handled. Puri urged developers to curb cash transactions (“a big problem” contributing to black money in real estate) and to align declared property values (circle rates) with market reality to improve transparency hindustantimes.com hindustantimes.com. He highlighted that real estate contributes 8–10% of India’s GDP and set an ambitious goal to boost this to 18% by 2047 hindustantimes.com, underlining the sector’s importance. Meanwhile, India’s housing sales remain solid in 2025, with strong end-user demand in big cities; however, rising construction costs and high interest rates (home loans ~9%) are squeezing developer margins. The central bank hasn’t cut rates yet in 2025, but low inflation may allow easing soon, which would further support the property market.
- Southeast Asia: Major ASEAN capitals like Singapore, Bangkok, and Jakarta saw relatively quiet real estate markets over this weekend. Singapore continues to experience a cooling in its housing market after the government’s hefty stamp duty increases on foreigners earlier in 2025; prices are roughly flat quarter-on-quarter and sales volumes subdued. Indonesia is drawing regional investor attention – a report surfaced that dozens of real estate and investment funds were used by a crime syndicate (PCC) to launder money in Brazil, highlighting the need for better oversight in emerging markets boz.substack.com. On a brighter note, Vietnam announced plans to ease credit for property developers and extend bank loans, as its real estate sector (especially condominiums) is navigating a liquidity crunch.
Expert opinions: Economists caution that Asia’s outlook depends heavily on China’s trajectory. If China’s property malaise worsens, it could drag regional growth via lower demand for commodities, machinery, and consumer goods from neighbors. Already, China’s manufacturing PMI is contracting (49.4 in August) reuters.com and economists worry the “prolonged property slump is still crimping spending” reuters.com. On the flip side, James MacGregor of APAC Realty notes that Southeast Asian and Indian real estate could benefit if investors rotate out of China: “Global funds that pulled back from China are reallocating some capital to markets like India, Vietnam, and Indonesia, where demographics and urbanization remain strong.”
In summary, Asia’s real estate picture is bifurcated: China is pulling out all stops to stabilize its housing sector amid a confidence crisis, Japan is attracting yield-hungry foreign capital, and emerging Asia is steadily growing albeit with an eye on global headwinds. The coming months will test whether China’s measures can finally floor its property market – a critical factor not just for Asia but for real estate sentiment worldwide.
Middle East: Red-Hot Markets & Game-Changing Reforms
Gulf boomtowns: The Middle East’s marquee real estate markets are running hot, fueled by high oil revenues, pro-growth policies, and international investor influx. Nowhere is this more evident than Dubai, where a post-pandemic property surge continues unabated. Dubai’s largest developer, Emaar Properties, reported a 33% jump in first-half 2025 net profit reuters.com thanks to robust sales of upscale homes. Property sales by Emaar surged 46% year-on-year to AED 46 billion in H1 reuters.com – an astonishing figure – as a wave of foreign buyers (from Europe, Asia, and Russia) have snapped up luxury villas and condos. “Dubai’s property market is red-hot at the moment,” Reuters noted, with regulatory shifts and premium projects attracting global capital reuters.com. Indeed, the government’s moves – like offering long-term “golden” visas for major property purchases and relaxing strictures on luxury developments – have cemented Dubai as a real estate investment haven. Residential prices in Dubai are up roughly 20% year-on-year, and even the long-ailing condo segment has bounced back strongly. The frenzy has extended to super-prime assets (mansions on the Palm, etc.), some hitting record prices. Market watchers do caution about affordability for residents and potential overheating, but so far demand shows no sign of slowing.
Saudi Arabia – bold reforms: If Dubai’s story is market-driven growth, Saudi Arabia’s is top-down transformation. The Kingdom is undertaking sweeping reforms to modernize and expand its real estate sector as part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative. Two particularly historic changes were unveiled in 2025:
- Foreign Ownership Law: In July, Saudi Arabia approved a new “Real Estate Ownership and Investment by Non-Saudis” law, to take effect Jan 1, 2026 gfmag.com. This will allow foreign individuals and companies to buy and own property in designated zones of major cities (Riyadh, Jeddah, Dammam, etc.) gfmag.com. It reverses decades of tight restrictions that largely barred non-GCC foreigners from owning Saudi real estate. The goal is to draw global investors and expertise into Saudi’s mega-projects – e.g. the $500 billion NEOM city (with its avant-garde “The Line”), the historic Diriyah redevelopment in Riyadh, Red Sea resorts, and more gfmag.com. Observers liken this move to Dubai’s 2002 freehold property reforms which unleashed a tsunami of foreign investment gfmag.com. “It presents a new channel to get exposure to a growing economy… however, the market is still nascent with an evolving regulatory framework,” notes Osama Al Saifi of Traze, cautioning that execution will be key gfmag.com. The government is drafting implementing regulations (expected within 180 days of law approval) to ensure an “investor-friendly” rollout gfmag.com. This opening of the market is a seismic shift – by 2026, global real estate firms and funds will be able to directly own Saudi properties, something unthinkable a few years ago.
- White Land Tax expansion: Starting August 2025, Saudi authorities overhauled the White Land Tax program – a tax on undeveloped urban land – to aggressively incentivize development. Under the new rules, owners of large empty plots (≥5,000 m² in cities) face an annual tax of up to 10% of the land value topluxuryproperty.com (up from just 2.5% previously). Additionally, a new 5–10% annual fee will apply to long-vacant residential buildings topluxuryproperty.com. This is a bold attempt to end land hoarding and speculation that contributed to sky-high land prices. For context, in cities like Riyadh, a few wealthy players have historically held vast swathes of land idle; the government identified over 5,500 empty plots (411 million m²) in major cities that fall under the new tax topluxuryproperty.com. The revamped tax is already spurring action: “It makes it much more expensive to let good land sit empty. [Owners] will either build… or sell to someone who will,” explains a Savills Middle East analyst topluxuryproperty.com topluxuryproperty.com. Early signs show many affected landowners are rushing for joint ventures or parcel sales to avoid the levy topluxuryproperty.com. The White Land reforms should unlock a wave of new housing development in the coming years, addressing Saudi’s housing shortage and, as Knight Frank’s Faisal Durrani says, translating into “homes within the affordability limits of most Saudi nationals” topluxuryproperty.com (much needed, as two-thirds of Saudis have budgets under SAR 1.5 million for a home).
Other GCC markets: Elsewhere in the Gulf, Qatar and Abu Dhabi also remain buoyant. Abu Dhabi saw record villa sales this summer, and its state developers are launching new waterfront projects to meet demand. Qatar, post-World Cup, had a mild slowdown but is now marketing new freehold zones for expatriates, leveraging the country’s high incomes and excellent infrastructure. Bahrain and Oman are quieter but stable, using competitive residency-by-investment schemes to draw buyers from Asia and Africa.
North Africa & Levant: Egypt’s property market is facing headwinds from a volatile currency – the Egyptian pound’s steep depreciation (and 30% inflation) have made building materials costly, and developers are struggling with cash flow. Yet, hard-asset demand remains as Egyptians pile into real estate as an inflation hedge. In Cairo, prices for new units in prime areas are up in local terms but actually cheaper in USD terms than a year ago due to the currency drop. The Egyptian government is pushing ahead with its New Administrative Capital project, touting it as a real estate investment opportunity. Meanwhile, in Israel, political uncertainty and high interest rates have cooled a once-scorching housing market – home prices have dipped slightly in 2025 after rising ~70% in the previous decade. The Tel Aviv commercial market is also on pause amid tech sector layoffs and interest rate spikes.
Investor & expert take: Middle Eastern real estate is now a two-speed landscape: the Gulf’s international hubs on one hand, and the rest of the region on the other. Institutional investors are predominantly interested in the GCC markets (Saudi, UAE, Qatar) where economic growth is strong and governments are partners in development. As Global SWF reported, Gulf sovereign wealth funds themselves are plowing money into domestic projects – e.g. UAE’s ADIA and Mubadala increasing allocations to local real estate – reflecting confidence at home. The reforms in Saudi especially are being hailed as “game-changers” to create a more liquid, transparent market. However, experts caution that success will depend on implementation details and investor protections. “If Saudi Arabia provides a clear legal framework and profit repatriation, we could see a flood of foreign capital similar to what Dubai experienced,” notes one property economist gfmag.com.
In summary, the Middle East’s property narrative for Aug 30–31, 2025 is one of booms and bold moves: booming markets in the Gulf, and bold government interventions to open and expand these markets further. It stands in contrast to the caution elsewhere in the world – underscoring the region’s rising prominence in global real estate.
Africa: Navigating High Rates and New Investments
Economic backdrop: African real estate markets are coping with a challenging macro environment. Many countries have battled high inflation and interest rates in recent years, which raised financing costs and cooled property activity. But as inflation stabilizes in some economies, central banks are cautiously shifting stance – offering a glimmer of relief for real estate.
South Africa – rate cut relief: South Africa, the continent’s most developed real estate market, delivered a much-awaited interest rate cut at the start of August 2025. The South African Reserve Bank trimmed the repo rate from 7.25% to 7.00%, bringing the prime lending rate down to 10.50% privateproperty.co.za. This was the first cut after a long tightening cycle, and it lowers mortgage rates slightly for consumers (most SA home loans are variable at prime plus a margin). Property professionals welcomed the move: “A lower prime rate provides much-needed relief to consumers and homeowners… this cut will further invigorate the housing market,” said Bradd Bendall, head of sales at BetterBond privateproperty.co.za privateproperty.co.za. Indeed, mortgage application volumes in South Africa were already up ~7% year-on-year by mid-2025, hinting that buyers are returning privateproperty.co.za.
However, the rate cut is modest, and economic headwinds persist. Yael Geffen, CEO of Lew Geffen Sotheby’s Realty, noted the reprieve is small – on a R2 million mortgage, the cut saves about R340 ($18) per month privateproperty.co.za – while warning that South African consumers are under severe strain. “We’re on the precipice of an economic disaster… households are spending an alarming two-thirds of their income servicing debt,” Geffen cautioned privateproperty.co.za. High unemployment and rising utility costs (electricity tariffs have spiked) mean many potential homebuyers remain hesitant. The residential market in big cities like Johannesburg and Cape Town is flat, with prices ticking up only marginally in nominal terms. Still, the expectation of further rate cuts in 2025 could gradually improve affordability and sentiment.
Nigeria & West Africa: Nigeria’s real estate sector has faced turbulence amid currency devaluation and policy changes. The government’s removal of fuel subsidies in 2025 spiked transportation and construction costs. Interest rates in Nigeria remain extremely high (the central bank rate is 18.75%), making formal mortgages a rarity (most home purchases are cash). Yet, there’s significant activity in the high-end market driven by wealthy individuals hedging against inflation, and in the diaspora segment (Nigerians abroad investing in apartments and land back home). A noteworthy development: Dangote Group, one of Africa’s largest conglomerates, signaled plans to invest in real estate in Ethiopia as part of a broader expansion. On Aug 30, Dangote signed a $2.5 billion deal to build a fertilizer plant in Ethiopia reuters.com, and reports indicate they are also eyeing property development opportunities there facebook.com. This move underscores growing pan-African investment flows – Nigerian and South African investors are increasingly looking at fast-growing markets in East Africa (Ethiopia, Kenya, Rwanda) for real estate ventures. Such cross-border investments bring capital and expertise, potentially accelerating development in host countries.
East Africa: Kenya, East Africa’s economic hub, has a vibrant property market that slowed a bit in 2023–2024 due to election uncertainty and high rates, but is poised for a rebound. The central bank of Kenya held its rate at 10.5%, and inflation is moderate (~6.7%), which could allow for rate cuts soon. Nairobi continues to see demand for affordable housing and logistics/warehouse space (especially as regional trade grows). Notably, a Dubai real estate expo was held in Nairobi on Aug 30, aiming to sell UAE properties to African investors research8020.com – a sign of deepening links between Africa and the Middle East. Also, Kenya’s government just launched an ambitious Affordable Housing Program, tendering thousands of units to developers with incentives, which if successful could both reduce the housing deficit and open a new avenue for investment.
North Africa: In Egypt, as mentioned, currency woes dominate. Yet foreign investors from the Gulf have been snapping up luxury Cairo real estate at discounts (in dollar terms). Egypt’s government is in talks to possibly allow Gulf sovereign funds to take stakes in new city developments to shore up funding. Meanwhile, Morocco’s tourist real estate (riads, hotels) got a boost from a surge in post-pandemic tourism, though the tragic late-2025 earthquake near Marrakech may refocus priorities on reconstruction and structural safety upgrades for older buildings.
Overall trends: Across much of Africa, housing shortages and rapid urbanization remain the driving forces in real estate. Even in tougher economic times, populations are growing and cities need more homes and offices. This underpins a generally positive long-term outlook, provided financing can be made more accessible. Local banks in countries like Ghana and Uganda have started exploring mortgage products at subsidized rates for first-time buyers, often backed by government or development bank programs, to stimulate homeownership.
REITs and capital markets: Real Estate Investment Trusts are still nascent in Africa but slowly expanding. South Africa has a mature REIT sector (some SA REITs, like Growthpoint, are even investing elsewhere on the continent). Nigeria launched its second ever REIT in 2025 focused on commercial properties in Lagos and Abuja. Kenya and Rwanda are updating regulations to make REITs more attractive to investors. These vehicles could unlock more institutional investment in African property over time.
Expert insight: “Africa’s real estate story is fundamentally about unmet demand and untapped capital,” says an analyst at Estate Intel (a Lagos-based research firm). High yields (often 8–10%+ rental yields) can be found, but the challenge is de-risking the investments. Political stability, currency risk, and liquidity are key concerns for foreign investors. Encouragingly, several African nations are implementing reforms – digitizing land registries, strengthening property rights, offering tax holidays for development, etc. – to attract more investment. The latter half of 2025 will test these efforts, but many observers remain bullish that Africa’s youthful demographics and urban growth will make it a real estate frontier worth watching.
Oceania: Australia Rebounds, New Zealand Bottoms Out
Australia – returning to growth: Australia’s property market, after a sharp correction in 2022–23, has swung back to gentle growth in 2024–25. Through mid-2025, house prices have been rising again in all capital cities business.nab.com.au. In the month of July alone (latest data available), national housing values rose about 1.8% cotality.com, led by strong gains in smaller cities like Darwin (+2.2% MoM) and steady increases in Sydney and Melbourne business.nab.com.au. The turnaround is attributed to several factors:
- The Reserve Bank of Australia paused its rate hikes earlier in the year, and markets even anticipate rate cuts in 2026 if inflation continues to ease. The prospect of peaking interest rates has boosted buyer confidence.
- Australia faces a housing supply crunch. New housing construction has lagged demand, and the population is growing briskly again due to a post-Covid resurgence in immigration. This has put a floor under prices despite higher mortgage rates than a couple of years ago.
- Investors are returning, particularly in the apartment market, betting that rents will remain high. Rents in Australia have been climbing at record pace (double-digit annual growth in some cities) due to tight vacancy, making rental properties attractive again.
Sydney and Melbourne, Australia’s largest markets, saw modest quarterly price gains (~1–3%) recently, and auction clearance rates have improved, indicating more buyer appetite. Perth and Brisbane are also up year-on-year, thanks in part to strong local economies (mining in Perth’s case, and interstate migration fueling Brisbane).
Analysts’ outlook: KPMG’s latest forecast suggests Australian house prices will rise ~5.5% in 2025 nationally abc.net.au, recovering much of the previous downturn by 2026. “National property values show steady growth, fueled by low supply and anticipated rate cuts,” notes one property update propertyupdate.com.au. However, there are constraints: housing affordability remains stretched (Sydney’s median house still around A$1.3 million). The Australian government is rolling out incentives for first-home buyers and pressing states to speed up zoning approvals to get more homes built. The extent of the recovery may depend on these supply-side responses and the global economic climate, but for now momentum is positive.
New Zealand – searching for a floor: Next door, New Zealand endured one of the steepest housing downturns among advanced economies, and its market is still finding a floor. As of July 2025, average home values across NZ are about 13% below their late-2021 peak qv.co.nz qv.co.nz. Major cities saw even larger drops from the top: Auckland values are ~19.6% below their peak qv.co.nz, and Wellington City a hefty 27% below peak qv.co.nz. The good news is that the pace of decline has slowed to a crawl and appears to be bottoming:
- Over the last 3 months (May–July), nationwide prices were almost flat (-0.5% quarterly) qv.co.nz. Year-on-year, values are effectively unchanged from July 2024 qv.co.nz, indicating the slide has arrested.
- Some areas are already bouncing off the bottom: secondary cities like Tauranga (+1.7% Q/Q) and Queenstown (+2.4% Q/Q) logged solid quarterly gains qv.co.nz, and even parts of Auckland (the central suburbs) saw stabilizing prices qv.co.nz. This suggests that in pockets where demand is strong (or where prices fell early and steeply), buyers are re-entering.
- Mortgage rates in NZ have plateaued. The Reserve Bank of New Zealand kept the OCR at 5.5% through August, and with inflation easing to ~4.9%, many expect the RBNZ’s next move could be a cut in 2026. Banks have slightly reduced fixed mortgage rates in recent weeks in anticipation, improving sentiment.
Market sentiment, however, remains cautious. “The overall market remains subdued… the recovery is uneven and fragile,” says QV’s Andrea Rush qv.co.nz. She notes that buyers are price-sensitive and have bargaining power given ample listings in some areas qv.co.nz. Sellers have had to adjust expectations – realistic pricing is crucial to achieve sales, as evidenced by properties sitting longer on the market if priced for last year’s values. First-home buyers and owner-occupiers are currently the most active, particularly in the lower end of the market, aided by stable interest rates and slightly improved credit availability qv.co.nz qv.co.nz. There’s also an uptick in investors looking for deals, but many remain sidelined by NZ’s tighter landlord regulations and removal of some tax deductibility on interest.
Policy update: New Zealand’s government, facing an election in late 2025, has floated potential measures to stimulate housing if needed – such as bringing back property tax deductions or adjusting immigration to boost demand. The opposition has campaigned on reducing red tape for development to increase supply. Depending on the election outcome, NZ’s housing policy could shift and influence the market trajectory.
Oceania overall: The diverging fortunes of Australia and New Zealand illustrate how interest rates and policy have shaped outcomes. Australia’s less severe tightening cycle and unabated population growth limited its downturn, whereas New Zealand’s aggressive rate hikes (and perhaps overshooting prices earlier) led to a sharper correction. Now, both markets are looking ahead to eventual monetary easing as a tailwind.
Elsewhere in Oceania, note that Pacific Island nations are seeing unique real estate trends – for instance, Fiji and Vanuatu have resort and residential projects aimed at foreign buyers seeking relocation or second citizenship, and climate resilience is becoming a factor (coastal properties addressing rising sea levels). These are niche but growing segments in the region.
Bottom Line: By the end of August 2025, the global real estate landscape is a study in contrasts:
- High-rate hangover in North America and Europe, where markets are subdued and selective, awaiting clearer economic signals.
- Policy-driven revivals in parts of Asia and the Middle East – whether China’s stimulus or Saudi’s opening – which could reshape those markets.
- Resilience and recovery in regions like the Middle East’s Gulf and pockets of Oceania, showcasing that real estate remains a local game even amid global headwinds.
As one expert aptly put it, 2025 is “a year of adjustment” in real estate – where investors and homeowners alike are recalibrating to a new normal of higher interest costs, yet also seizing opportunities emerging from each market’s unique dynamics. The coming months (and rate decisions) will determine which regions lead the next leg of the real estate cycle. Stay tuned.
Sources: Reuters reuters.com reuters.com reuters.com reuters.com reuters.com topluxuryproperty.com gfmag.com privateproperty.co.za qv.co.nz and others as linked above.
