AIAIG Overseas Property Investment Weekly Report: Global Price Trends, Rental...

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This article focuses on the structural changes in the global real estate market at the end of 2025, analyzing housing price and rental trends in key regions such as Southeast Asia, Japan, and Dubai, and providing decision-making insights for Chinese investors from the perspectives of capital flows, cyclical risks, and portfolio strategies for the upcoming quarter.

AIAIG Overseas Property Investment Weekly Report: Global Price Trends, Rental...

1. Global Market Close: From Broad Gains to Divergence

Entering the final month of 2025, the global major real estate markets are in the "closing season." Based on data and industry feedback, housing price trends show significant divergence: European and American markets are generally entering an adjustment phase, while some cities in Southeast Asia and the Middle East maintain resilience, and Japan continues with steady structural growth. In terms of the macro environment, expectations for interest rate cuts by the U.S. and European central banks have been delayed, but inflationary pressures are easing; Asian central banks generally maintain low interest rate ranges, making real estate assets in this region relatively more attractive.

"The fluctuation of global housing prices is shifting from a single economic cycle to an intertwined response of policy rhythms and demographic structures across different countries."

Southeast Asia: A Model of Stable Growth in the Region

Thailand's real estate market saw a steady recovery in transaction volume in the fourth quarter, driven by low tax policies and continued tourism revival. Apartment prices in Bangkok's core areas increased slightly by 3% year-on-year, while rents in second-tier cities like Pattaya and Chiang Mai rose by 5%–7%, making them hotspots in the long-term rental market. Vietnam, on the other hand, achieved 'stable prices and rising volume' by increasing affordable housing and strictly regulating speculation, and is expected to enter a supply-demand balance phase by 2026.

Malaysia's rental yield remains around 4.5%, with some apartments in Kuala Lumpur's city center reaching a reasonable rent-to-price ratio of 1:200–1:220, driven by the return of foreign buyers. Although overall transactions have declined in Singapore, high-end residential properties maintain firm prices due to scarce supply. Regional differentiation is intensifying: cities driven by tourism, education, and manufacturing perform better, while projects reliant on speculative funds adjust more quickly.

Japan: Mild Uptrend Continues, Rent Becomes Core of Returns

Residential prices in Japan's major cities continued to see slight increases in 2025, with the average price of new apartments in Tokyo rising by 2.8% year-on-year, while Osaka and Fukuoka saw increases of approximately 2.2% and 1.9%, respectively. Despite the limited growth, the stability is extremely high, making them a safe-haven allocation for global funds outside of 'high-volatility markets'. Rental yields generally range from 3% to 4.5%, and vacancy rates remain low.

"The investment logic for Tokyo and Osaka has long shifted from 'appreciation expectations' to 'stable cash flow,' making them suitable as underlying assets for cross-border investment portfolios."

Dubai: High Returns and Correction Expectations Coexist

After three years of cumulative price increases, Dubai's real estate market has entered a phase of rational adjustment. By the end of 2025, the average housing price had declined by about 3% compared to mid-year, with some high-end apartments and resort-type projects seeing price drops of 5%–8%. However, rental yields remain in the range of 6%–8%, and rental occupancy rates in some communities, such as JVC and Business Bay, exceed 95%. This indicates that despite short-term price fluctuations, long-term cash flow remains attractive.

Meanwhile, buyers from China, India, and Russia remain the primary transaction group, accounting for approximately 45% of the total foreign investment transactions. While developers increase promotions and installment policies, they also introduce more project schemes combined with long-term visas, making 'identity + investment' type assets continue to be popular among high-net-worth individuals.

European and American Markets: Structural Adjustments Under High Interest Rate Pressure

House prices in the United States and the United Kingdom continue to face pressure amid high interest rates. The national average home price in the U.S. has decreased by approximately 4% year-on-year, while transaction volumes in London's apartment market in the U.K. have dropped by 15% compared to the same period last year. However, properties in high-quality school districts and financial core areas still maintain support, especially in regions with stable demand for self-use and long-term rentals. In contrast, the European mainland market (particularly in Portugal and Germany) has experienced a slight rebound due to tax reforms and a decline in energy prices.

"European real estate is no longer a simple safe haven, but has become a 'slow-return asset', requiring a longer cycle to show returns."

II. Capital Flows and Changes in Investment Mentality

The global capital flow in 2025 exhibits three significant characteristics:

From Europe and America back to Asia: Influenced by high tax burdens and political uncertainty, a large amount of personal and family funds are returning to Asian markets with stronger policy certainty and visa convenience;
From short-term speculation to long-term allocation: As policies tighten in multiple countries, the window for short-term property flipping and arbitrage is closing, replaced by the stable strategy of 'rental income is king';
From single assets to portfolio logic: More and more investors are starting to allocate assets across different cities and risk levels to balance returns and safety.

III. 2026 Outlook: Multipolarity and Differentiation Become the Norm

Based on comprehensive policies and market trends, AIAIG believes that the global real estate investment landscape in 2026 will exhibit three major trends:

• Polarization of Returns: High-yield markets such as Dubai and Pattaya will continue to attract active capital, but with increased volatility;
• Policy Stratification: Markets like Japan and Vietnam will become preferred choices for stable funds by enhancing transparency through institutional reforms;
• Asset Stratification: Investors will simultaneously hold residential properties, serviced apartments, and REITs, forming diversified portfolios.

In such a landscape, investors should reassess risk budgets and investment cycles, and reasonably allocate the proportion of 'cash flow assets' and 'appreciation assets'.

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Conclusion: In the final weeks of 2025, the key phrase in the global real estate market is 'rebalancing.' The source of investment returns shifts from price differentials to cash flow, and from speculative logic to institutional dividends. For Chinese investors, the core question ahead is not 'where to buy the cheapest,' but 'where to hold the most stable.' The future winners will be those who can understand the resonance patterns of multi-market cycles and establish stable income systems through diversification.

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AIAIG Opinion2025年12月15日

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