What does tariff uncertainty mean for real estate?

Key takeaways

• Uncertainty caused by tariffs could weigh on the economy and real estate, but the asset class enters this period in a relatively strong position.
• Values substantially reset over the last two years, which helps to de-risk the asset class going forward. 
• Construction levels are at the lowest levels in over a decade, which bodes well for fundamentals.
• Real estate continues to deliver income, resilience and diversification. In a period of uncertainty, investors should focus on property sectors with resilient demand backed by megatrends and structural imbalances. 

Private real estate entered 2025 with prospects looking up, having materially rebalanced over the course of a two-year downturn for the asset class. 

Following the April tariff announcements, there are questions about how tariffs will impact the economy and the budding recovery in real estate. 

Real estate risk can be broadly lumped into three categories – property values, supply and demand. The Global Financial Crisis of 2008 was a perfect storm for real estate; the asset class entered the downturn at peak values and construction activity, before demand plummeted. 

Conversely, coming into 2025 values have reset significantly and new construction is at the lowest levels in over a decade. The significant risk at this point is demand, which can be somewhat mitigated by picking the right buildings, markets and property types.