Global property markets have stalled - does a recovery still seem possible?

With housing markets worldwide losing momentum, does buying a home remain a sound investment?

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Seoul's housing market has climbed even as property markets elsewhere have largely stalled. Real house prices in the South Korean capital rose by more than 10% over the past year, according to the 2026 UBS Global Real Estate Bubble Index. Much of the surge in investment followed the AI-chip boom, which sent money pouring into Korea.

Lisbon and Madrid remain popular property markets. Zurich and Geneva are painfully expensive, partly because Switzerland's interest rates are so low. Still, the broader trend is flat: across the 23 global cities UBS analysed, residential property prices rose by only 0.5% on average in real terms over the past 12 months.

Canada recorded the steepest declines. Vancouver and Toronto both fell 10% in real terms as the country tightened restrictions on foreign buyers. Most US cities also posted real-term declines, with one exception: AI hub San Francisco. Germany fared poorly too; inflation-adjusted prices in Frankfurt and Munich dropped by nearly 4%.

UBS identifies only two cities as facing "high" bubble risk: Zurich and Tokyo. In the Japanese capital, inflation-adjusted home prices have climbed roughly 50% in seven years, driven by greater borrowing among buyers and the early signs of faster wage growth.

London recorded a 1% year-on-year fall. In real terms, prices in the capital are down 15% since 2021, while "stretched affordability" continues to weigh on any recovery.

Outside London, UK house prices have barely moved. Lloyds puts the average home at 298,441 in September, almost unchanged from 12 months earlier. Five-year fixed-rate mortgages now average 6%.

Stocks are eclipsing property worldwide

Property no longer looks like the reliable "path to wealth" it once did, according to The Economist. In England, the average home is "now worth less in real terms than it was two decades ago."

Global household wealth rose by £40 trillion in 2025, McKinsey Global Institute calculations show. Stock markets produced roughly 57% of that increase, while property contributed only 15%. In the US, stocks made up more household wealth than property in July - a first since World War II.

Buying outside bubble conditions still has its advantages. UBS says average market exuberance now sits well below the levels seen before interest rates started climbing in 2021.

Urban housing demand remains strong: over the past five years, rents have generally risen alongside incomes. London still has rents near record levels, reflecting a housing shortage that has not gone away.

Over the medium term, property in most cities will probably protect against inflation. But don't count on your house to make you rich.