Real estate: A hesitant recovery

Regional developments varied widely (Figure 26). Eastern Europe recorded the strongest increase at +10.6%, followed by Australia and New Zealand at +8.5%. Both comfortably exceeded their long-term growth rates despite the pressure from higher financing costs. Japan also stood out: real-estate assets increased by +5.0%, compared with a long-term average of just +0.7%. Together with the recent acceleration in household borrowing, this provides further evidence that Japan may finally be leaving its long deflationary period behind.

Western Europe recorded growth of +4.1%, slightly above its long-term average of +3.5%. North America meanwhile was the clear exception: growth slowed sharply from +4.9% in 2024 to just +1.8% in 2025, less than half its long-term rate of +3.9%. The global slowdown was therefore driven primarily by the largest housing market.

As with financial assets, a clearer picture emerges when real-estate wealth is measured per capita and adjusted for inflation (Figure 27). The long shadow of Japan’s property crash remains visible: over the past two decades, real-estate wealth per capita was essentially flat in real terms, despite the recent recovery.

Real gains were positive in Australia and New Zealand, North America and Western Europe, but generally modest. Compared with financial assets, the gap was particularly pronounced in North America, where real financial assets per capita grew around 2pps faster per year, and in Japan, where the gap was around 1.3pps. In Australia and New Zealand and Western Europe, by contrast, the difference was only around 0.2pps annually. Property may provide stability, housing services and diversification, but capital appreciation alone has generally been a weaker engine of wealth creation than participation in financial markets.

The country ranking of real estate assets nevertheless shows how strongly housing can reshape the overall picture. Switzerland had the highest real-estate assets per capita at EUR350,450, followed by Australia at EUR279,310 with the US taking the 7^th spot at EUR174,030. But what does the ranking look like when net financial assets and real estate assets are presented together? Figure 29 provides the answer. Switzerland overtakes the US and claims first place, with combined wealth of around EUR626,430 per capita. Australia meanwhile is the biggest beneficiary, climbing seven places from tenth in the adjusted net-financial-assets ranking to third once property is included. Sweden and Japan each fall six places, while Italy drops four. Germany moves up one position to tenth. These shifts expose two very different models of household wealth: some countries build wealth predominantly through financial markets, while others hold a much larger share in bricks and mortar.