Global Living Sector to Thrive in 2025 as Multifamily Investments Surge

U.S. Multifamily Market Sees Record Highs Despite Challenges in Q3 2025

The U.S. multifamily market has continued its upward trajectory with record-breaking numbers in the third quarter of 2025. According to Newmark's latest report, the sales volume reached $43.8 billion, marking a 12.6% increase from the previous year. However, a slight decline in rent growth by 0.1% year-over-year indicates potential challenges ahead. The demand for rental units remains robust, with net absorption hitting 42,000 units in the same period. These dynamics illustrate a strong but complex landscape for real estate investors navigating elevated interest rates and ongoing supply chain issues.

European Market Faces Apartment Construction Challenges Amidst Strong Demand

Europe’s multifamily sector is grappling with construction challenges even as demand for new apartments remains high. A report from Callan highlights that inflation has significantly increased the cost of building materials, making it financially tricky to develop new multifamily units. The situation is compounded by regulatory uncertainties across various European countries, which have led to a cautious investment climate. Despite these issues, the sector is buoyed by a strong appetite for rental housing, especially in urban centers, which continues to attract cross-border investments.

Asia Pacific Sees Strong Demand for Purpose-Built Student Accommodation

In the Asia Pacific region, purpose-built student accommodation is emerging as a strong investment category. According to the latest insights from Walker & Dunlop, the student housing transaction volume is projected to rise significantly, supported by stabilizing interest rates and increasing university enrollment. This sector has shown remarkable resilience, with rent growth outpacing traditional multifamily housing. Limited new developments and robust demand are shaping a competitive landscape, making it a lucrative area for investors looking to diversify their portfolios.

Living 15 Markets Dominate with 98% of Global Living Investment Activity

The JLL Global Living Investment Universe report identifies the Living 15 markets as the focal point for investment activity. These markets accounted for 98% of living investment and 32% of global commercial real estate transactions over the past five years. The report forecasts that the sector will see $1.4 trillion in transactions over the next five years, driven by cross-border investments, which have comprised a quarter of living investment recently. This concentration highlights the importance of these markets in shaping global real estate investment strategies.

The report forecasts that the sector will see $1.4 trillion in transactions over the next five years.

Rental Demand Slows in U.S. as Homeownership Becomes More Attractive

Recent trends indicate a slight softening in rental demand in the U.S., influenced by the narrowing gap between renting and homeownership. According to Origin Investments, interest rates are expected to stabilize between 3.75% to 4.75%, making homeownership a more viable option for many. As the cost-effectiveness of renting decreases, multifamily investors may need to reassess their strategies, focusing more on offering competitive amenities and flexible lease terms to attract tenants.

Future Implications: What Investors Can Expect for 2025 and Beyond

As we look towards the end of 2025, the global living sector presents both opportunities and challenges for investors. The multifamily and student accommodation markets are poised for robust growth, driven by favorable demographic trends and institutional interest. However, rising construction costs and the potential for regulatory changes require careful navigation. For investors, focusing on markets with high absorption rates and strong demand signals could provide significant returns. Monitoring macroeconomic indicators such as interest rates and inflation will be essential for making informed investment decisions.