Why 2025 Is a Crucial Year for Property Investment
Looking into 2025, I can say with conviction that the global real estate market has turned a corner. That’s not based on speculation—it’s backed by data. Our most recent global sentiment survey showed the strongest optimism since February 2022. A majority of respondents now believe that real estate market conditions will improve within the next six months.
But let’s not kid ourselves: 2025 won’t be an easy year. Conditions vary dramatically—not only between countries, but between sectors, regions, and even neighbourhoods. The continued recovery will be accompanied by equally high levels of uncertainty, driven by policy shifts, financial market volatility, and geopolitical risks.
That said, for those prepared to look globally, the rewards could be immense.
Why Look Abroad? The Case for Overseas Property Investment
Investing overseas is no longer reserved for ultra-wealthy investors or multinational firms. More Australians are now looking at overseas property investment as a strategic play to diversify their portfolio, access higher yields, and hedge against domestic market volatility.
But it’s not just about diversification. It’s about identifying where the next cycle of value creation will happen.
And from what I’m seeing, 2025 is shaping up to be a breakout year for early movers—particularly in select sectors like living, logistics, and data centres, and across both emerging and mature markets.
🇺🇸 United States: Liquidity Reawakening
In late 2024, we observed institutional investors becoming more active as borrowing costs and property values stabilised. The U.S. is entering 2025 with improved liquidity conditions, especially in sectors like logistics and alternative assets.
We’ve already seen yield compression in investor-favoured categories, and I expect this trend to continue—especially as pro-industry policies, nearshoring, and infrastructure upgrades drive demand in industrial and distribution hubs.
Prime cities like New York, Boston, and Chicago are becoming more competitive due to a significant drop in new office construction, which is pushing occupiers toward a limited supply of high-quality space. This creates upside for investors who understand where demand is heading.
🇩🇪 Germany: Europe’s Safe Haven
If you’re buying property overseas in 2025, Germany deserves a place on your radar. The country offers a rare combination of economic strength, infrastructure reliability, and tenant demand—particularly in Berlin, Munich, and Frankfurt.
We’re seeing increased investor conviction in student housing, build-to-rent, and ESG-certified buildings. Demand is consistently strong, and there’s a growing willingness among occupiers to pay a premium for sustainability-aligned assets.
I’ve also tracked energy retrofits closely. In office assets, for instance, we’re seeing average savings of $4–5 AUD per square metre from light retrofits, while mechanical upgrades can deliver $17. In more energy-intensive sectors like healthcare and data centres, the savings are exponentially higher—up to $118 per square metre in some cases.
🇯🇵 Japan: Stable Yields and Rising Demand
Japan’s real estate market continues to attract foreign capital—thanks to low interest rates, stable policy environments, and a well-regulated system that supports foreign buyers. In 2025, markets like Tokyo, Osaka, and Fukuoka are showing increasing demand in both residential and commercial sectors.
One reason I’m optimistic about Japan? Living strategies are expanding. Investors are now targeting build-to-rent and student accommodation across more cities. According to internal forecasts, $1.4 trillion will be deployed into core living strategies globally over the next five years—and Japan is well-positioned to benefit.
🇦🇪 United Arab Emirates: High Yield, Low Tax
Dubai and Abu Dhabi are arguably the most investor-friendly real estate markets in the world right now. They offer rental yields of 7–10%, zero income tax, and a robust pipeline of mega projects.
What’s also notable is the ease of foreign ownership. In contrast to more restrictive markets, the UAE continues to position itself as a global real estate hub for overseas investors—whether you’re buying luxury apartments or commercial buildings.
🇲🇾 Malaysia: Affordability Meets Growth
Malaysia is one of the best-kept secrets in overseas property investment right now. Cities like Kuala Lumpur offer excellent rental yields (averaging over 5%) and incredibly low entry prices.
For Australian investors, the Malaysia My Second Home (MM2H) programme provides additional incentives such as visa residency and favourable tax structures.
Combine that with booming tourism, infrastructure expansion (e.g. KL–Singapore high-speed rail), and a friendly legal framework, and it’s clear: Malaysia is a top contender in 2025.
🇨🇳 China Overseas Land: Watching the Giant
No discussion about global real estate would be complete without mentioning China Overseas Land, one of the region’s most significant property developers and institutional players.
While domestic dynamics in China remain complex, their overseas portfolio strategy—especially in gateway cities and long-term mixed-use projects—is worth tracking. Their activity often signals where long-cycle capital is heading next.
Office Markets: A Tale of Two Worlds
Across multiple countries, we’re observing a divergence. Premium office buildings in CBDs are becoming harder to find, while secondary, older assets are facing obsolescence.
Our future of work survey shows that many companies are pivoting back to growth. We expect office demand across property types to stabilise or even increase in 2025. That means greater competition for prime, sustainable buildings, particularly in cities like London, Madrid, New York, and Tokyo.
Expect strong emphasis on human-centric workplaces, ESG compliance, and hybrid-enabled layouts. Four days a week in-office is becoming the new norm.
Data Centres: Demand Explosion
If there’s one sector I’m most bullish on—it’s data centres.
Despite a projected 20% increase in supply this year, demand will still outpace availability. The U.S. alone accounts for 58% of global data centre market share, but we’re now seeing accelerated interest in Europe and Asia Pacific.
Energy use is a key concern—and opportunity. Our research shows savings from energy optimisation in data centres can hit $118 per square metre. That’s a game changer in asset value and tenant appeal.
My Final Take: Navigating Global Real Estate in 2025
There’s no one-size-fits-all approach to buying property overseas. What matters most is understanding the macro trends, then zooming into micro-level market dynamics.
In 2025, I believe we’ll see:
- Continued divergence between asset quality tiers
- Strong investment momentum in living, logistics, and data centres
- Investors prioritising resilience, location, and ESG performance
- Early-mover advantage for those who act fast before liquidity fully returns
That’s why I always say: This market rewards clarity, not complacency.
