Suburban Markets Gain Attraction
Despite ongoing global economic uncertainties, international residential properties remain on the radar of investors, particularly in cities with strong economic fundamentals, stable governance, and sustained housing demand. Markets with growing populations and supply-demand imbalances will likely see continued price appreciation, while cities with declining affordability may experience a shift towards rental demand.
- Investors are increasingly turning to suburban markets, where housing remains more attainable, and rental yields remain attractive.
- Sustainable and energy-efficient homes are gaining favour among both buyers and investors.
- Smart developments and properties that align with environmental, social and governance (ESG) principles are in high demand.
Technology and Sustainability
Technology and sustainability are playing a larger role in shaping the future of residential real estate. Energy-efficient homes, smart developments, as well as properties that align with environmental, social and governance (ESG) principles are gaining favour among both buyers and investors.
| Characteristics | Benefits |
|---|---|
| Energy-efficient homes | Lower energy consumption, reduced carbon footprint, increased property value. |
| Smart developments | Improved property management, enhanced security, increased property value. |
| ESG principles | Increased transparency, reduced risk, improved brand reputation. |
Rental Markets
Rental markets are expected to remain strong, particularly in cities where housing supply is constrained. With higher borrowing costs and affordability concerns still present in some regions, the demand for rental properties will continue to rise, offering opportunities for investors seeking stable rental income.
- Rental markets will remain strong in cities with constrained housing supply.
- Demand for rental properties will continue to rise, driven by higher borrowing costs and affordability concerns.
- Investors seeking stable rental income will find opportunities in cities with strong rental demand.
Inflation and Trade Tensions
Fresh concern is emerging in the form of inflation due to the latest trade tariffs, while the resulting turmoil in global stock markets may dampen sentiment. Trade tensions and tariffs have long been a source of market uncertainty, and have already driven up costs for businesses and consumers. Imposition of tariffs on key materials such as steel and aluminium has increased construction costs, leading to higher property prices.
“The current US regime’s tariff moves are raising the spectre of renewed inflationary pressures, which may continue to affect investor confidence and purchasing power.”
Investment Destinations
The following cities are considered key investment destinations:
- United Kingdom: The UK remains a top real estate investment destination, with the Prime London area still a go-to for globally wealthy individuals.
- Australia: Australia remains an attractive investment destination due to its stable government policies, population growth, and housing undersupply.
- United Arab Emirates / Dubai: Dubai’s residential property market is driven by strong economic growth, a favourable tax environment, and high rental yields.
United Kingdom
The UK remains a top real estate investment destination, with the Prime London area still a go-to for the globally wealthy. As interest rates begin their decline with the drop in mortgage rates – from highs of over 7 per cent to below 5 per cent – buying activity has improved with local buyers, particularly in the primary and secondary residential markets. Hotspots include:
- Prime Central London: The cornerstone of London’s luxury property market, this sector holds strong heritage appeal, with sales recently improving and capital values stable after a period of low growth.
- Birmingham: Ongoing regeneration projects, such as HS2 and Digbeth, are fuelling growth, with house prices expected to rise by 26.4 per cent between 2025 and 2029.
- Cambridge: A thriving tech and academic hub with strong rental yields and consistent property appreciation.
- Manchester: This Northern powerhouse continues to attract investors due to its strong rental demand and capital growth potential.
- London: The UK capital and global hub for finance, technology and education with a lot of potential.
- Leeds: A growing financial and tech hub outside of London, this thriving city in Yorkshire offers strong long-term investment potential.
Australia
Australia remains an attractive investment destination due to its stable government policies, population growth, and housing undersupply. The Reserve Bank of Australia initiated its first rate-cut in February 2025 to 4.1 per cent, signalling the beginning of an easing cycle that is expected to support the housing and mortgage markets.
- Sydney: A consistent leader in property appreciation, benefiting from infrastructure expansions and strong migration inflows.
- Perth: Experiencing rapid population growth and economic expansion driven by the mining sector.
United Arab Emirates / Dubai
Dubai’s residential property market is driven by strong economic growth, a favourable tax environment, and high rental yields. The kingdom has several high-performing residential areas, each catering to different investor profiles.
- Luxury properties abound at Palm Jumeirah, Downtown Dubai and Jumeirah Bay Island.
- For high rental yield, look to Jumeirah Village Circle (JVC), Dubai Sports City and International City.
- Upcoming growth hubs are being developed in Dubai South, Al Furjan and Meydan.
- For an investment riding on the gaming and entertainment economy, there is Ras Al Khaimah.
Conclusion
While inflation is emerging as a fresh concern, a resilient economy, despite trade-related headwinds, will bode well for brick-and-mortar asset investments. While the US Federal Reserve has signalled a gradual reduction in rates and maintained a rate hold between 3 and 4 per cent, the European Central Bank, Swiss National Bank and Bank of England have already cut rates to 2.65 per cent, 0.25 per cent and 4.5 per cent, respectively, as at April 2025. Traders are now pricing in four additional Fed rate cuts in 2025 to support economic growth in view of an impending slowdown and recession. These rate cuts are expected to improve liquidity in real estate markets. Market growth will be driven by several factors that encourage investment and demand for housing in the emirate. Inflation is expected to improve, supporting renewed buyer confidence and transaction volumes in key markets.
