Behind the Rise in Housing Prices in Over 80 Countries

“Most countries’ housing markets appear to be thriving on the surface, but there’s a ‘inflation illusion’—the real housing price data may not look so good.”

Text / Ba Jiuling

Sydney, Occupied by Chinese People

“All of Sydney is basically a Chinatown,” recently exclaimed a young traveler in Australia.

In downtown Sydney, you can often hear Mandarin in the air; at the Sydney Opera House, three out of four singers on stage are Chinese; according to Google Maps reviews, when visiting a well-known local breakfast spot for brunch, the Chinese owner greets you with a big smile…

“More and more Chinese are settling in and investing in Sydney these years,” said local Chinese friend Kai Xi. Over the past two years, Kai Xi and her Australian husband swapped for a villa in Sydney with a mortgage rate of 5%, and last year, she invested in a property in Melbourne.

Melbourne, which is on par with Sydney in status, is nicknamed “New Gold Mountain”—the 19th-century Gold Rush attracted many Chinese workers to settle there. When cars leave Melbourne’s West Gate Bridge onto the M1 highway, the old factories along the road have been replaced by residences. A Guangdong guide nearby took the opportunity to promote: “A five-bedroom detached house of over 200 square meters costs only 700,000 AUD (about 3.5 million RMB).”

Among the most favored real estate investment destinations for Chinese, Australia has consistently ranked in the top three, with popular cities including Sydney, Melbourne, and emerging stars like Adelaide, Perth, and Brisbane. By 2025, Chinese mainland funds will account for nearly one-third of all overseas property purchases in Australia.

With the influx of buyers, Australian housing prices rose by 9.6% in 2025, continuing an 18-month upward trend. Sydney, the most expensive city, saw an average increase of 100,000 AUD, up 6.4% year-on-year.

However, the Australian housing market is just a microcosm. The rapid rise in prices and soaring demand for investment properties appeared in nearly all major economies worldwide in 2025.

Australia, under construction

Are Global Housing Prices Rising Everywhere?

In 2025, over 80 major countries and regions worldwide saw nominal housing prices increase. A rough summary:

• The top tier includes 21 countries with over 10% growth. India’s largest city, Mumbai, saw a 35% increase in investment property prices;

• The second tier comprises 62 countries with positive growth, including many volatile African, Middle Eastern, and South American nations. Argentina, implementing a “shock therapy” approach, had nearly 70,000 real estate transactions, hitting an 18-year high.

Regionally, according to Eurostat, in Q3 2025, EU countries experienced an average annual house price increase of 5.5%, with rent rising 3.3%. Over the past decade, EU house prices increased by 63.3%, with moderate to advanced countries like Portugal and Croatia doubling in value, and Hungary’s prices soaring by 275%.

U.S. house prices have been on a growth trajectory for the past two years. Zillow data shows that in the first half of 2025, the median U.S. home price surged by 6.8% year-over-year. By early 2026, the S&P/Case-Shiller index indicated that, over the three months ending February, U.S. home prices in 20 cities rose 5.9% YoY, reaching a new high since 2014, with five consecutive months of YoY growth. The average 30-year fixed mortgage rate has climbed to 6.19%, and the median age of first-time homebuyers has risen to a record 40 years.

This also puts President Trump in a dilemma. On one hand, he claims, “I want to push up home prices for those who own homes,” but on the other hand, he states, “Housing is for living, not for corporate hoarding,” and has announced administrative measures and pushed Congress to legislate to ban large institutional investors from buying single-family homes.

A House for Sale in a Florida Community, USA

Turning to Asia, the four most watched countries/regions are Singapore, Japan, Vietnam, and Hong Kong.

Singapore’s housing prices have been stable for a long time. Despite government efforts to cool the market, in 2025, private residential prices still increased by 3.4% year-on-year, marking the ninth consecutive year of growth. Morgan Stanley predicts this upward trend will continue until 2030, when prices could double.

Compared to that, Hong Kong’s real estate market, which has benefited significantly from the “removal of辣” policies (abolishing additional stamp duties, buyer stamp duties, and new residential stamp duties), just ended a three-year decline. In 2025, private housing price index rose by 3.25% YoY. Several reports suggest that Hong Kong’s market will “rebound” in 2026, with increases of 10-15%, and over 20% growth in the next three years.

Vietnam’s housing prices rebounded after a few years of stagnation. In 2025, apartment prices increased by over 20-30%, far outpacing villa and land price gains. Hanoi and Ho Chi Minh City’s new apartment prices rose 40% and 23% YoY, with average prices surpassing 20,000 RMB, approaching the level of strong second-tier Chinese cities.

Who Is the Biggest Driver of Housing Prices?

Rapid growth in population (immigration) and overseas buyers is the main engine behind this global housing boom.

A typical example is Baghdad, Iraq. Post-war reconstruction, aided by “Chinese infrastructure,” has transformed Baghdad from a war-torn ruin into a city of new residences and skyscrapers. Over 20 years, Baghdad’s population doubled, with many young elites flooding in, drastically changing the supply-demand dynamics.

Housing construction sites in Baghdad

The influx of immigrants is another factor driving “mechanical” population growth, mainly in developed European countries, Oceania, and North America, stimulating local housing demand.

Changes in supply and demand push up prices. After prices surge, investment and speculation follow, prompting overseas buyers to accelerate their investments over the past decade.

For example, in the first half of 2025, Japan’s real estate investment increased by 22% YoY, surpassing 3 trillion yen. Overseas investors bought properties worth 3.7 times the previous year’s amount, accounting for 32% of the market.

Singapore has long been a favorite among overseas investors. Large influxes of population and limited land resources have maintained property values, especially in the luxury segment. According to Bonah, only 0.5% of Singapore citizens buy luxury homes worth over 10 million SGD, but by the end of 2025, 7.9% of foreign buyers in the core central region (CCR) purchased properties over 10 million SGD.

Singapore’s private apartments have no residency restrictions, and foreigners can obtain up to 70% mortgage rates, with interest rates around 2% annually, making investment very accessible. Since 2017, high-net-worth Chinese buyers have been the largest overseas investors in Singapore real estate. PwC summarizes this as “investors’ demand for defensive assets in turbulent environments.”

Hong Kong’s market also benefits from mainland Chinese buyers. According to Centaline, in 2025, 13,500 buyers registered with Mandarin pinyin, a 10% increase from 2024. Among private residential buyers, those using Mandarin pinyin accounted for 24%, up about 20% annually, leading to the saying, “For every four homes sold in Hong Kong, one is bought by mainland Chinese.”

Another city experiencing “overbuying” by Chinese is Dubai. Over the past five years, Dubai’s ultra-luxury home transactions have ranked first globally. In 2025, some popular developments saw Chinese or Chinese-origin buyers accounting for 20-30%. With a minimum down payment of 10%, the ability to transfer ownership before delivery, yields of 4-7%, and no income tax, Chinese buyers see Dubai as a “substitute” for dollar assets.

The growth of overseas investment has prompted governments worldwide to introduce temporary policies to cool the market.

In April 2023, Singapore announced an increase in foreign buyer stamp duty from 30% to 60%, which helped cool the market somewhat, though there are reports that luxury property taxes might be relaxed this year.

Canada introduced a two-year “Prohibition on Non-Canadians from Purchasing Residential Property Act” in 2023, which was later extended for another two years. The decline in overseas buyers has led to a slight drop in prices. In April last year, Australia also implemented a two-year ban: foreigners are prohibited from purchasing existing homes. Countries with similar policies include New Zealand, Thailand, Switzerland, Denmark, and Chile.

The “Inflation Illusion” Behind High Housing Prices

However, most countries’ housing markets look prosperous on the surface, but there’s an “inflation illusion”—the real housing price data may not be so rosy.

CICC analyzed the housing price trends over the past five years in 50 overseas economies and found that, in local currency terms, nominal house prices increased by over 30% on average, but when converted to USD “real house prices,” the average actually declined by about 2%.

The Bank for International Settlements (BIS), which serves as the “central bank of central banks,” maintains a database of real estate prices from 63 central banks worldwide. The latest (Q3 2025) data shows that global real house prices have actually decreased by 0.7%, while nominal prices increased by 2%.

For example, the Bank of Korea and BIS, after adjusting for inflation, found that real house prices in Korea have been declining for 13 consecutive quarters since Q3 2022, confusing many Koreans.

Further analysis shows that, since 2000, residents in Japan and some export-oriented economies have seen their incomes outpace house prices, but in major Western economies like Australia, income growth has lagged behind housing prices. Kai Xi also mentioned that currently, about 80% of bank loans in Australia are mortgages, with household debt reaching 120%, very similar to the “ten-thousand lottery” scene of the past, indicating that besides external forces, domestic support for prices is not solid.

The second illusion is that high overall housing prices are mainly supported by assets in major city centers, with some countries experiencing severe regional disparities.

According to a report by Visual Capitalist, luxury homes and townhouses in major Canadian cities like Toronto and Vancouver have seen the highest investment returns in North America over the past 20 years, unaffected by interest rate hikes. Meanwhile, some immigrant-dense high-rise districts have experienced sharp declines, dragging down overall prices, and are rated by BIS as “the countries with the largest global house price declines.”

In recent years, Japan’s housing prices have mainly been supported by investment in the Tokyo metropolitan area. The rise in Tokyo’s housing prices has already exceeded that during the 1980s bubble era. Most real estate investment growth is concentrated in high-quality properties in central Tokyo. For example, the average price of new apartments in Tokyo’s metropolitan area is about 95 million yen, up 19.3% YoY, but prices in the Kinki region, including Nagoya and Fukuoka, have declined over 5% in 2025. Meanwhile, suburban “single-family homes” have far lower gains than apartments.

South Korea’s situation is similar: prices in third-tier cities have fallen sharply, while some areas in Seoul have risen, with Seoul’s housing prices reaching a new high in 2025, mainly driven by extreme leverage through interest rate manipulation.

In Seoul’s Gangnam district, real estate agents’ ads outside properties

From a longer-term perspective, despite fluctuations caused by supply and demand, the overall value of real estate in core areas remains stable. A study found that, over the past 2,000 years—from Chang’an to Florence—the “world-class city center house prices” have maintained a constant value: 1,000 grams of gold. Currently, humanity is in a rare “credit expansion” period, and gold has not yet returned to its central value.

Overall, considering the current global housing situation, the main factors influencing prices, from largest to smallest, are population (including immigration and overseas investment), economy, interest rates, and policies. Among these, population remains the most critical, while abnormal policies have created a “virtual high” in prices, explaining some fundamental issues in certain countries’ real estate markets. At the same time, from a historical perspective, only super-large cities will see prices rebound, because only big cities can attract population and industry growth.

Author | Xu Tao | Editor | He Mengfei

Chief Editor | He Mengfei | Image Source | VCG, Internet

Author’s note: Personal opinions only, for reference.