Global Housing Market Splits as Prices Drop in Emerging Economies
Basel, Saturday, 27 December 2025.
The Bank for International Settlements reveals a striking divergence in the global housing market for the second quarter of 2025. While global real property prices fell by 0.8% year-on-year, this aggregate figure masks a split reality: advanced economies managed modest gains, whereas emerging markets contracted by nearly 2%. Perhaps the most telling insight is the long-term stagnation in specific major economies; real property valuations in both China and Italy currently sit below their 2010 levels. This contrasts sharply with markets like Türkiye, where values have doubled since the Great Financial Crisis, highlighting the uneven nature of global real estate recovery.
Diverging Fortunes: Advanced vs. Emerging Markets
The aggregate global decline of 0.8% in real house prices for the second quarter of 2025 represents a slight moderation from the 1.0% drop recorded in the previous quarter [1]. However, the headline number belies a distinct geographical split. The 1.9% contraction in Emerging Market Economies (EMEs) was not uniform; it was primarily driven by a sharp 3.6% decline in Asia [1]. In contrast, other emerging regions displayed resilience, with Central and Eastern Europe recording significant growth of 3.0%, and Latin America posting a 1.9% increase [1]. Within the Advanced Economies (AEs), the recovery remains steady, with over 70% of these markets experiencing moderate price growth between 0% and 10% [1].
Regional Outliers and Long-Term Trends
A closer examination of specific nations reveals extreme volatility. North Macedonia and Portugal emerged as top performers in real terms, surging by 16% and 15% respectively in Q2 2025 [1]. Conversely, the steepest corrections were observed in Hong Kong SAR, which fell by 8%, and China, which declined by 6% [1]. Notably, Canada—despite being an advanced economy—deviated from the positive trend of its peers, registering a significant 5% decline [1]. In the Eurasia region, the Central Bank of Armenia recently introduced a new residential real estate index to track local developments [3]. Data spanning from Q1 2018 to Q2 2025 highlights that Armenia’s regions have significantly outperformed the capital, Yerevan, delivering annualized returns of 13.6% compared to 7.9% [3].
U.S. Economic Resilience Amidst Global Shifts
While the global housing sector navigates these structural adjustments, the broader United States economy signaled strong momentum in the third quarter of 2025. Real Gross Domestic Product (GDP) increased at an annual rate of 4.3%, marking an acceleration of 0.5 percentage points from the 3.8% growth observed in the second quarter [2]. This expansion was primarily attributed to increases in consumer spending, exports, and government spending, although investment figures provided a partial offset [2]. It is important to note that the release of this data was complicated by administrative hurdles; the initial report replaced estimates originally scheduled for October and November, which were delayed due to a government shutdown [2].
Summary
The economic landscape closing out 2025 presents a complex picture of regional decoupling. While the U.S. economy accelerates with 4.3% GDP growth and rising corporate profits despite legal headwinds [2], the global housing market remains fragmented. The persistent valuation slump in major economies like China and Italy, contrasted against the post-crisis surges in markets like Türkiye [1], suggests that investors must navigate a highly uneven recovery where local dynamics significantly outweigh global trends.