As of February 2025, the global rental market is experiencing notable shifts influenced by economic conditions, regulatory changes, and evolving supply and demand dynamics.
United Kingdom
In the UK, home prices are projected to rise by 3.5% this year, attributed to lower borrowing costs following the Bank of England’s rate cuts. Rental costs are expected to increase by 4.0% nationally, as demand continues to outpace supply. The Labour government’s plans to build 1.5 million homes over the next five years aim to address housing shortages and introduce a Renters’ Rights Bill to enhance tenant protections.
Switzerland
Switzerland’s rental market remains robust, driven by high demand and low vacancy rates. In Q4 2024, average quoted rents experienced a slight decrease of 0.4% compared to the previous quarter but saw a year-on-year increase of 2.0%. This trend is largely due to significant immigration and a halt in household downsizing amid ongoing housing shortages. Construction activity has increased, which may slightly alleviate demand pressures.
United States
In the U.S., rental trends vary by region. Austin, Texas, for instance, has seen a substantial 22% decline in rental prices from their peak in August 2023. This decrease is attributed to an influx of new rental units, resulting from significant development investments and housing policies aimed at increasing supply. Consequently, landlords are offering incentives to attract tenants, leading to a median rent drop to $1,399 in January 2025.
Overall, the 2025 rental market is characterized by regional disparities, with factors such as economic policies, construction activity, and demographic shifts playing pivotal roles in shaping rental trends. Globally, the real estate rental market is projected to grow from $2,693.47 billion in 2024 to $2,915.55 billion in 2025, at a compound annual growth rate (CAGR) of 8.2%. This growth is driven by factors such as soaring home prices, which increase the demand for rental properties as individuals seek alternative housing solutions. While certain regions are experiencing rent moderation due to improved supply and decreased demand, others continue to face challenges with housing affordability and availability. These dynamics underscore the importance of localized analysis in understanding rental market trends.