International Property Market Fluctuations: Shortage of Homes, Construction Surge, and Policy Aftershocks (Sept 18-19, 2025)
In the ever-evolving world of real estate, several significant developments are shaping the landscape across various regions.
The United Arab Emirates (UAE) continues to thrive, with sectors like construction and realtor activity contributing substantially to its economy. Notably, realtor activity saw a 5% increase in Q1 of this year. Elsewhere, Saudi Arabia is opening its doors to foreign investors, having approved a landmark law allowing regulated foreign investment in real estate. This move is a major step towards achieving Saudi Arabia's Vision 2030 goals.
Meanwhile, Argentina's new free-market policies, including the scrapping of rent caps, have led to a surge in rental listings and a significant drop in rents. On the other hand, the U.S. housing market is facing challenges, with a 7% decline in housing starts in August, reaching the lowest level in 2.5 years. Lennar, the second-largest U.S. homebuilder, reported a 46% drop in Q3 profit due to high mortgage rates and affordability issues dampening demand.
In Egypt, the government's decision to end old rent controls aims to spur private investment in housing and urban renewal. However, this change has stirred anxiety for millions of tenants, as rent caps are phased out over 5-7 years. Similarly, Turkey is grappling with high inflation, which is distorting its real estate market, with many new construction projects on hold as costs soar.
Japan's central bank, the BOJ, surprised markets by maintaining rates at 0.5% but moving to sell off its massive ETF and REIT holdings, accelerating the unwind of its stimulus. This decision could have far-reaching implications for the Japanese real estate market.
China's Evergrande, one of the country's largest developers, is facing significant financial struggles, with its founder's assets seized by liquidators after the developer's collapse under $300 billion in debt. This incident serves as a cautionary tale for the global real estate market.
In Europe, modular construction companies and developers using prefabricated building methods are the main actors active in cities experiencing an overextension in new residential construction. Notably, the UK government has set a target to build 300,000 new homes annually by 2025, with modular construction playing a central role.
The Israeli property market is facing headwinds from political uncertainty and high interest rates, leading to a sharp decrease in home sales volume. Conversely, the UAE expects its GDP growth to accelerate to 4.9% in 2025, thanks in part to higher oil output and strong growth in the non-hydrocarbon sector.
In Egypt, Qatar, and Germany, positive signs are emerging in the real estate sector, with apartment building permits jumping in Germany and a spike in real estate sales in Qatar and Egypt. The UK's house price growth is also forecast to slow, improving first-time buyer affordability.
Lastly, Saudi Arabia's new real estate law allows non-Saudis (residents, companies, even diplomatic entities) to own and invest in property under regulated conditions. The Real Estate General Authority in Saudi Arabia is rolling out the details, with expectations that this reform will attract foreign capital to mega-projects like NEOM city and Red Sea resorts.
These developments underscore the dynamic nature of the global real estate market, with various factors influencing its trajectory in different regions. As always, it is essential to keep a close eye on these trends to make informed decisions in the property market.
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