Which Country May See Growth in the Primary Housing Market
Owning a home is more than just a financial investment; it's a profound milestone, a place where memories are made, families grow, and futures are built. As we navigate the complexities of 2025, the question arises: which countries are poised to experience significant growth in their primary housing markets? The answer lies at the intersection of economic trends, demographic shifts, and evolving societal values.
In the United States, the housing market is showing signs of recovery. After a period of stagnation, existing-home sales have remained relatively stable, with a slight decline of 0.2% in August 2025 compared to July. However, new home sales have surged, reaching an annual rate of 800,000 in August, marking the highest level since January 2022. This uptick is attributed to a dip in mortgage rates, which have boosted demand for new homes. Fannie Mae projects a notable recovery, expecting home sales to increase by nearly half a million units by 2026, driven by a decline in mortgage rates to 5.9% by the end of 2026. This easing of borrowing costs is anticipated to trigger a substantial increase in home sales and mortgage originations, offering hope for buyers and sellers previously sidelined by affordability concerns.
Across the Atlantic, Germany's housing market is experiencing a cautious rebound. After a challenging period marked by rising inflation and interest rates, home prices in Germany increased by 3.2% in the second quarter of 2025, signaling a recovery in the property market. This rise, though modest, indicates a shift toward stability. The German housing market is characterized by a persistent demand and constrained supply, factors that are expected to drive further price increases. However, affordability remains a concern, with rental prices continuing to rise sharply, creating a disconnect between buying and renting markets. The volume of new lending for house purchases has continued to grow, demonstrating a substantial 37.5% increase against the comparable period last year, reflecting a renewed interest in homeownership.
In Asia, India stands out as a burgeoning market. Cities like Kolkata have seen significant growth in the residential real estate sector, adding approximately 4,890 new residential units in the second quarter of 2025 — a 56% year-on-year increase. The Mumbai Metropolitan Region and Pune lead in new launches, catering to a growing middle class eager to invest in their first homes. Despite economic uncertainties, housing demand remains strong, powered by rising incomes and urbanization. Similarly, Vietnam's real estate market is gaining momentum, with Ho Chi Minh City and Hanoi attracting both local and international investors. The country's rapid urbanization and expanding middle class contribute to a robust housing market poised for continued growth.
In Africa, Kenya emerges as a key player. Nairobi and other metropolitan areas are witnessing new residential projects designed to meet first-time buyers' needs, often in partnership with government housing initiatives. The demand for affordable housing is rising, fueled by urban migration and a youthful population eager to establish roots. This trend positions Kenya as a promising market for primary housing growth, offering opportunities for both local and foreign investors.
These global trends underscore a universal truth: the desire for homeownership transcends borders. While each country's market is influenced by unique factors, the overarching themes of urbanization, economic growth, and policy support are driving the expansion of primary housing markets worldwide.
However, challenges persist. Economic shocks, interest rate fluctuations, and policy changes can impact housing markets, making them susceptible to volatility. For instance, in the United States, while new home sales have surged, existing-home sales have remained largely unchanged, indicating a potential mismatch between supply and demand. Similarly, in Germany, despite the rebound in home prices, affordability issues continue to pose challenges for potential buyers.
In conclusion, the countries most likely to experience growth in the primary housing market share certain characteristics: a growing urban population, a rising middle class, supportive government policies, and a cultural inclination toward homeownership. As we look to the future, these markets offer promising opportunities for buyers and investors alike, provided they navigate the inherent challenges with informed strategies and a keen understanding of local dynamics.
