E-Paper
Sign In
Dubai set to emerge as top global luxury residential market in 2025
The emirate secured third place, with its luxury real estate market experiencing a remarkable 16.9 per cent increase in 2024
- PUBLISHED: Tue 4 Feb 2025, 11:54 PM
Dubai is poised to become the world's premier luxury market by 2025, as the city, along with Seoul and Manila, has driven prime residential prices across 44 global cities in 2024, according to recent property market forecasts.
In Knight Frank's global prime cities index, Dubai secured third place, with its luxury real estate market experiencing a remarkable 16.9 per cent increase in 2024. Seoul topped the index with an impressive 18.4 per cent growth, followed closely by Manila at 17.9 per cent.
Recommended For You
Savills has projected that luxury property markets in 30 major financial hubs, including Dubai, will grow by an average of 1.6 per cent in 2025, building on a 2.2 per cent increase in 2024. Notably, Dubai stands out as the frontrunner, with forecasts suggesting a price surge of up to 10 per cent.
“While the global luxury property market is expected to grow modestly in 2025, Dubai's rapid price appreciation distinguishes it as a leader in this sector. Cities like Madrid, Barcelona, and Tokyo also remain attractive to investors, but markets in mainland China and some parts of Europe could face challenges,” the Savills report noted.
According to Knight Frank, the average price growth in luxury markets across 44 global cities was 3.2 per cent annually, an improvement from previous quarters but still below the 20-year average growth rate of 5.3 per cent.
Seoul emerged as the top-performing market in 2024, witnessing an annual price increase of 18.4%, a significant rise from 4.6 per cent in Q3. This growth occurred despite ongoing political uncertainties. Tokyo's prime market rebounded with a 10.6 per cent increase in Q4, reversing earlier declines. The weakened Yen, combined with Japan's highest interest rates in 17 years, has attracted foreign buyers.
After a period of volatility, markets in North America, Europe, and Asia-Pacific are stabilizing, clustering around the global average of 3.2 per cent. Data shows that 34 out of 44 cities recorded positive annual growth, with fewer than 20v experiencing price declines, indicating broad market resilience.
Liam Bailey, Knight Frank's global head of research, stated: “The path to lower rates has become more complex due to persistent inflation in developed economies. However, many analysts anticipate further cuts in 2025, which will be crucial for unlocking higher house price growth this year.”
The luxury housing markets worldwide saw a notable uptick in the final quarter of 2024, achieving an average annual price growth of 3.2 per cent. This marks the strongest performance since Q1 2024 when the index recorded 4.1 per cent annual growth across the 44 cities. Knight Frank reported positive momentum, with two-thirds of cities enjoying annual growth and fewer than 20 per cent seeing declines.
The luxury market in Dubai, having experienced a solid 6.4 per cent growth in 2024, is expected to lead the way with double-digit price appreciation in 2025. This solidifies its status as a top destination for high-end real estate investment.
Other cities projected to perform well include Madrid and Barcelona, where property values could rise by up to 5.9 per cent. In 2024, Madrid recorded the most significant price increase among global cities, surging 9.4 per cent, while Barcelona followed closely with an 8.6 per cent uptick.
Asia's luxury property market shows a varied outlook. Cities like Tokyo, Seoul, and Bangkok are anticipated to continue their growth trajectory in 2025, building on strong performances from the previous year. In 2024, luxury prices in Tokyo rose by 8.6 per cent and by 5.1 per cent in Bangkok. Meanwhile, mainland Chinese cities such as Shenzhen and Guangzhou faced price declines exceeding 4.0 per cent, with further decreases expected this year.
In the U.S., cities like Miami and New York, which saw declining luxury property prices in 2024, are projected to rebound in 2025. Miami may grow by up to 3.9 per cent, recovering from a 1.2 per cent decline, while New York's luxury market is forecasted to rise by up to 1.9 per cent.
Conversely, London, which experienced flat growth in 2024, is expected to decline by up to 3.9 per cent in 2025, making it one of the weakest performers alongside Hong Kong and Guangzhou. As Dubai continues to thrive, it solidifies its position as the world's most promising luxury residential market.
