Across the globe, housing markets are facing turbulence, but the causes and consequences differ sharply from one country to another. As the United States grapples with a sharp housing correction in several high-growth cities, analysts are closely watching similar markets, including Australia and Canada, to see whether they might follow suit—or if their own unique dynamics will steer them in a different direction.
In the United States, the pandemic era unleashed a dramatic surge in property prices, particularly in cities with relaxed planning regulations such as Miami, Austin, and Denver. But that boom has given way to a pronounced correction. According to news.com.au and other sources, house prices in 19 of the 50 largest U.S. metro areas have now dropped below their July 2022 levels. Miami has seen the steepest decline, with median house prices falling 19% from their peak, while Austin follows closely at 15% down. This sharp downturn is largely attributed to a supply-driven correction, as rising mortgage rates and an influx of new housing inventory have forced sellers to meet buyers on price.
Michael Yardney, founder of Metropole Property Strategists, explained to news.com.au, “The US market is faltering because many cities are seeing more homes come to market just as high mortgage rates bite, so prices are softening. If US homeowners want to sell, they have to meet buyers where they are, which often means lowering prices.”
This situation is in stark contrast to cities like New York and Los Angeles, where house prices have actually risen—by 16% and 18% respectively since 2022—highlighting the deep regional variations within the American housing market. The pandemic-era building boom in states with relaxed zoning laws, like Texas and Colorado, led to significant oversupply in fast-growing cities, further exacerbating price declines when demand cooled.
Australia, meanwhile, appears to be marching to the beat of its own drum. Despite the global headwinds, Australian housing values continue to rise. Analysts point to a chronic undersupply of housing, record population growth driven by immigration, falling interest rates, and strong policy support for buyers as the key factors insulating Australia from a US-style correction. “Australia is the opposite – we don’t have enough properties to meet demand,” Yardney said. “We’re experiencing record population growth, falling interest rates, rising buyer and seller confidence and government incentives that will pull forward first homebuyer demand, all against a backdrop of chronic undersupply.”
Australia’s construction sector is struggling to keep up. New dwelling approvals are at decade lows, and elevated building costs have led many developers to delay or abandon projects. This has created a persistent imbalance between supply and demand, with immigration-fueled population growth adding further pressure. The government’s 5% deposit scheme for first homebuyers—moved forward to October 2025—aims to stimulate demand. While some economists have warned that such incentives could drive up prices, Housing Minister Clare O’Neil has cited Treasury estimates that the scheme will only raise values by 0.5% over the next six years.
Even as Australia’s Reserve Bank has cut interest rates three times recently, improving market sentiment, the country’s housing market remains characterized by hot competition for limited stock. “That combination of factors would add fuel to already hot competition for limited stock, which is why our housing markets are set to keep outperforming,” Yardney told news.com.au.
New Zealand’s experience offers a cautionary tale. Like the US, New Zealand’s house prices soared during the pandemic, only to tumble in the years since. This reversal was triggered by a mix of relaxed zoning laws, a ban on foreign buyers, and the removal of tax advantages for investors. The so-called ‘upzoning’ reforms in Auckland allowed for more townhouses and apartments, increasing supply and putting downward pressure on prices. When the Ardern government banned non-resident foreigners from buying homes and scrapped investor tax breaks, the market began to cool. The current Luxon government has reversed some of those tax changes, but the market continues to trend downward.
Canada presents yet another variation on the theme. In cities like Vancouver and Toronto, the role of investors—both foreign and local—has come under the microscope. According to data compiled by Simon Fraser University’s Andy Yan, between 2016 and 2022, 50% of newly built condos in Vancouver and 58% in Toronto were investor owned. Investors also accounted for 52% of all property types in Toronto and 43% in Vancouver during that period, not including presale purchases. These numbers are “extraordinary,” said David Ley, professor emeritus at the University of British Columbia.
Canada's market has been shaped by two major booms: a 2016-2017 surge in foreign buying, cooled by a series of government measures, and a 2022 pandemic-era boom driven by ultralow interest rates and local buyers. As interest rates and inflation have spiked, both booms have fizzled. Developers are now lobbying the federal government to lift the foreign buyer ban and revive investor interest, arguing that foreign capital is needed to finance new construction and increase supply. “We have vilified that investor who … took the risk of buying presales,” said Barrett Sprowson, senior vice-president at Peterson Real Estate, in an interview with The Globe and Mail. “That investor [is not] a bad guy.”
Yet, 27 housing experts, including Yan and Ley, have pushed back, warning that an investor-driven market—especially one fueled by foreign wealth—pushes housing out of reach for locals and risks artificially reflating prices. In a letter to federal and provincial leaders, they argued that reintroducing foreign capital would “reflate prices artificially.” Critics like Toronto mortgage broker Ron Butler have also questioned the wisdom of relying on foreign buyers to prop up the market. “You build stuff that you know no one can afford, so you get foreign people in to buy it. And then eventually, it will either stay empty, or somebody will struggle to find the money to buy it to live in, or [the owner] is just going to sit back and leave it empty until inflation pushes the rents back up again. Okay. Right. But the concept is ludicrous,” Butler said.
Butler points out that while prices for single-family homes and townhouses may have stabilized, the condo market is still sliding, with thousands of new units and purpose-built rentals coming to completion and immigration levels dropping due to policy changes. This glut, he argues, means the bottom for high-rise condos is nowhere in sight.
As these examples show, there’s no one-size-fits-all answer to housing market woes. While the US contends with oversupply and rising rates, Australia’s chronic undersupply and robust demand keep prices buoyant. New Zealand’s regulatory reforms have cooled its market, and Canada remains caught in a tug-of-war between developers seeking capital and experts warning of affordability risks. The only certainty? The world’s hottest housing markets are facing a reckoning—each in their own way.
