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The global housing market has been encountering a multitude of issues, including but not limited to price increases, government interventions, and disparities in economic conditions. Some countries around the world are showcasing strong resilience, while others are facing serious challenges.
The property market in China is in crisis, seeing close to no growth in new home prices in January 2024. The market registered a 5% year over year decline due to the 5.3% drop observed in January 2025. There have been efforts by the Chinese government to go ahead and prime the real estate market by instituting reductions in mortgage prices and granting tax reliefs.
Despite these measures, sales of residential properties continue to be in decline. China’s total unsold property stock accounted for 390.88 million square meters by 2024. There is an undeniable oversupply in the second-hand market, extremely poor demand, and a noticeable decline in the population of would-be homeowners who come together and represent these observed significant setbacks.
Across the pond, the U.K.’s housing market was more resilient in 2024, with house prices increasing by 4.7%. Despite higher borrowing costs and affordability, mortgage activity remained strong, particularly in the North, where prices trailed behind the South. However, the upcoming stamp duty reform in 2025 will also fuel the market into a frenzy as buyers rush to get ahead of the higher tax. The initial boom, however, should be followed by leveled housing activity, with modest growth of 2-4% expected as the economy picks up.
In Britain, the Labour Party has promised a “housing revolution” by constructing 370,000 new homes each year. However, affordability remains a persistent issue that has been a primary cause of the problems, as property prices have increased faster than salaries. There are plans to rebuild inner-city areas and expand public housing, which are still in the early stages but can potentially be the long-term answer to the housing shortages.
Across the Atlantic, Spain and Portugal are also, unfortunately, plagued by housing shortages and unaffordability across Europe. New rent controls and a law that puts caps on rent increases have been implemented in Spain, and the Portuguese government has committed to constructing 59,000 new houses by the year 2030 to attempt to address the growing housing crisis. Portugal also has notable local initiatives, especially in Cascais, Lisbon, which has been making homes available to teachers to address housing challenges.
Italy is also experiencing an equal housing crisis, particularly in Venice, whose overabundance of tourist apartments has added to the housing shortage for residents. Milan, Bologna, and Rome are all seeing rents skyrocket, and Venice has passed legislation to limit short-term rentals to contain the crisis. Similarly, Paris, France has seen issues as rents have increased. Despite attempts from the government to manage the increase by capping rent increases, social housing remains an issue.
Conversely, Mexico and Colombia are on fire in Latin America’s real estate markets. Both countries saw substantial 10.9% and 9.4% price increases, respectively, in 2024, thanks to interest rate cuts and strong sales.
The global housing market outlook is expected to remain fairly uncertain for the near future. While the Latin American residential real estate market has been exhibiting strong growth, other countries, notably China and certain parts of Europe, have rather large hurdles to jump over. The market’s future will be shaped by government actions, adjustments to mortgage rates, and measures that ensure the sustainable development of residential real estate.
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