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The US residential market remains robust, with the vacancy rate dropping by nearly 1 percent. The demand-supply dynamics support rent growth, and although capital markets have slowed, deals are still likely to close. Higher interest rates have led to better spreads, making real estate relatively attractive compared to the equity market.

Europe's residential sector benefits from shorter lease terms, allowing rent adjustments to match inflation. Strong fundamentals, such as housing shortages and increasing rental demand, support the sector. European markets see residential properties as more resilient compared to other sectors amidst tariff uncertainties.

The rising costs of construction are limiting new housing supply, which in turn, sustains optimism for existing properties. The slowdown in new development is expected to have a significant positive impact on market fundamentals, outweighing any potential demand decrease due to tighter immigration policies.

Both the US and Europe face demographic shifts, particularly an aging population, creating opportunities for developing senior living and assisted living facilities. This is especially relevant in Europe, where such accommodations are less established.

Looking ahead, residential real estate offers a defensive and resilient investment option in an uncertain world. With favorable supply-demand dynamics and rental rate inflation, the sector is expected to stabilize and improve over time.