Global Real Estate Trends: Insights from Key Markets – 2026 Edition

This article first appeared in City & Country, The Edge Malaysia Weekly on December 29, 2025 – January 4, 2026.

Australia

Ben Burston, Chief Economist of Research and Consulting

After a prolonged period of uncertainty, the Australian market is experiencing a resurgence. In 2025, we witnessed a notable recovery across various asset types, particularly in industrial assets, which saw a year-on-year increase of 3.1%. Brisbane emerged as a leader in this sector, with asset values jumping 5.5%.

Retail markets mirrored this upward trend, boasting an average capital value increase of 2%, particularly thriving at major regional and neighborhood centers. Conversely, the office market demonstrated a more fragmented recovery, with Sydney, Brisbane, and Adelaide leading the charge.

A pivotal shift in this growth cycle is the transition from yield compression to income growth as the primary revenue driver. With interest rates stabilizing, there’s limited scope for further yield tightening. Instead, rental growth is set to stimulate performance, particularly as new development slows due to rising construction costs and higher tenant incentives. This scenario particularly favors prime assets in central business districts (CBDs), fostering enhanced rental growth.

Investors are increasingly eyeing sectors like build-to-rent, co-living, and student housing, with the latter emerging as a significant growth area. Strong fundamentals and a marked recovery trajectory suggest robust momentum and liquidity in 2026.

Canada

Mark Fieder

Canada’s commercial real estate investment landscape has been dominated by urban centers like Toronto and Montreal. Toronto particularly excelled in industrial sales, closely followed by land and retail. Multifamily properties marked their presence in Montreal, while Vancouver exhibited strong activity in recent office transactions.

Despite some market fluctuations, multifamily and industrial sectors remain highly attractive to investors. In 2026, Montreal and Toronto are anticipated to drive increased leasing and investment performance, especially in industrial rental markets.

The office sector is showing promise with declining vacancy rates across many Canadian markets, catalyzed by renewed employee returns, enhancing leasing activity. Meanwhile, retail continues its transformation amid shifting consumer preferences and a scarcity of new development.

With the Bank of Canada possibly facilitating interest rate cuts, investor appetite for commercial real estate is expected to rise, even as macroeconomic conditions prompt caution.

China

James Macdonald

In 2025, major Chinese cities like Beijing and Shanghai struggled to find stability, with weak demand colliding with significant new supply. The resultant high vacancy rates in both office and retail sectors created ongoing challenges for landlords.

Rents have fallen, extending a corrective phase that’s lasted several years, manifested in subdued consumer sentiment and cautious corporate expansion. Despite these difficulties, some segments, like high-end residential, have found modest success.

Looking to 2026, a slow stabilization is anticipated, influenced by GDP growth projected at approximately 4.5%. However, consumer sentiment and leasing activity will remain conservative as cities focus on stabilizing demand rather than accelerating growth.

The residential rental market stands out as an attractive sector, driven by solid long-term fundamentals. Retail has begun to garner interest, especially in second-tier cities where higher yields are offered. Nevertheless, inventory levels and economic conditions will continue to pose risks.

Hong Kong

Simon Smith

The Hong Kong real estate market experienced continued weakness throughout 2025, with values declining in the residential segment amid oversupply issues in offices and fluctuating retail performance.

While some stability is noted in prime office leases, retail spaces are recovering unevenly as mainland tourists return. The demand for data centers remains robust, driven by the rise of the technology sector. In 2026, a cautious recovery is anticipated, particularly in the retail sector linked to tourist demand, while the office market will continue grappling with high vacancy rates.

India

Anuj Puri

In India, the Mumbai Metropolitan Region and Bengaluru have established themselves as vibrant real estate hubs, continuing to dominate with significant transaction volume in the commercial office and residential sectors.

Bengaluru achieved an impressive 10.2 million sq ft of net absorption, attributed largely to global corporations setting up operations in the area. Both cities are now shifting towards luxury housing, significantly influencing market dynamics.

Looking ahead to 2026, these cities are likely to sustain growth driven by strong demand for housing and commercial assets.

Indonesia

Willson Kalip

Jakarta is emerging as a beacon of property growth in Indonesia. Key sectors such as landed housing, premium retail, and green office developments are thriving. Infrastructure expansions, particularly transit-oriented projects, are proving essential for propelling property market growth.

The government’s supportive measures, like tax incentives, are contributing to steady demand. Looking forward, strengthening purchasing power and economic recovery could further enhance market sentiment well into 2026.

Japan

Koji Naito

Japan is witnessing a remarkable surge in property investment, particularly in Tokyo, which accounted for a significant portion of transaction volumes in 2025. Interest from offshore investors reached unprecedented highs, driven by a robust demand for office spaces as companies return to physical operations.

2026 is set to continue this trend, with strong rental growth anticipated across various sectors. The stable financial environment, aided by low-interest rates, enhances Japan’s appeal to investors seeking quality assets, affirming its status as a competitive market.

New Zealand

Chris Dibble

As 2025 closes, New Zealand’s urban centers display encouraging signs of recovery. Auckland, Wellington, and Christchurch are experiencing steady demand across commercial and residential sectors, with a distinct flight to quality in office spaces.

The market outlook for 2026 appears cautiously optimistic, bolstered by stable interest rates and solid investment conditions. Continuing infrastructure developments and demand in sectors like industrial and retail underpin a robust property landscape.

Portugal

Alexandra Gomes

Portugal’s real estate market is stabilizing, characterized by a renewed investor confidence and robust activity in prime locations like Lisbon and Porto. The office sector remains attractive, supported by strong occupancy, while retail shows dynamic potential driven by tourism.

The industrial sector is set for significant growth, with various ongoing projects expected to enhance investment volumes in 2026.

Singapore

Chua Yang Liang

Southeast Asia is undergoing a transformative shift, with Singapore leading as a pillar of investment activity amid evolving geopolitical circumstances. The nation’s market strengths, coupled with a growing middle class and robust foreign investment, position it favorably for future growth.

Investment trends point towards technology-driven sectors, including data centers. Despite some geopolitical uncertainties, Singapore’s resilience paints a promising picture for continued growth in the coming year.

London, The UK

Emma Steele

The UK sees a remarkable resurgence in real estate investment, with London leading the charge in 2025. The market’s liquidity and transparency make it a favorable destination for cross-border investments, although economic growth remains challenging.

2026 is expected to sustain this momentum, driven by increasing demand in various sectors, particularly in retail and offices, as market conditions stabilize.

New York, the US

Tan Wei Min

New York’s property market is seeing upward momentum in prices and sales, particularly in Manhattan and Brooklyn, attributed to decreasing financing costs and pent-up demand. As mortgage rates decline, the market is set to rebound, especially in the ultra-luxury segment.

Despite persistent challenges in commercial real estate, the potential for renewal and restructuring presents ample opportunities across the residential sector.

Vietnam

David Jackson

Vietnam’s property market is navigating through legal and administrative changes with robust economic growth underlining its potential. As reforms improve governance and transparency, expectations for a breakout year are building.

Although the residential market continues to thrive, sectors such as logistics and industrial properties are poised for growth given the country’s expanding urban landscape and pivotal trade position.

This comprehensive analysis offers a snapshot of the dynamic state of global real estate. Each key market presents distinctive challenges and opportunities, underscoring a varied outlook as the world approaches 2026.