Turn up the volume on your real estate success at Inman On Tour: Nashville! Connect with industry trailblazers and top-tier speakers to gain insights, cutting-edge strategies, and invaluable connections. Elevate your business and achieve your boldest goals — all with Music City magic. Register now.
Despite shifts in geopolitical power, market uncertainty and other risk factors impacting the investment landscape today, economists on Tuesday predicted a year of global GDP growth, according to The Wealth Report, an annual market snapshot of the global trends impacting the world’s wealthiest populations.
Conducted by Douglas Elliman and Knight Frank, the report delves into wealth trends across geographical areas, generations and investment sectors, and indicates a sustained demand in real estate investment by the wealthy.
“Even with elevated global risks, for me the standout takeaway from this year’s report is the breadth of investor opportunities,” Knight Frank’s Global Head of Research Liam Bailey wrote in the report. “From growing luxury residential markets, through established, as well as new, commercial property opportunities, to the next big collectible sectors, the prospects for growth are compelling for those willing and able to look beyond the risks.”
Below are some highlights from this year’s report, including global luxury residential market growth and shifts in the management of generational wealth across family offices. The full 2025 Wealth Report can be accessed here.
Seoul, South Korea | Canva
Global market growth
Prime residential property prices saw steady growth in 2024 with Middle Eastern and Asian markets performing strongest as global interest rates ticked down slightly, according to The Wealth Report.
Prices for prime properties, generally the top 5 percent in each market, rose 3.6 percent in 2024, a modest uptick from the 3.3 percent growth seen in 2023.
More than three-quarters of the 100 markets tracked by Knight Frank’s Prime International Residential Index (PIRI) saw positive annual price growth in 2024. Asian and Middle Eastern markets drove annual price growth, with Seoul (18.4 percent), Manila (17.9 percent), Dubai (16.9 percent), Riyadh (16.0 percent), Tokyo (12.1 percent) and Jeddah (9.6 percent) leading the charge.
Regional price growth overall in the Middle East increased 7.2 percent on an annual basis, the highest of any region, followed by 6.3 percent growth in Latin America and the Caribbean. Meanwhile, high interest rates paired with slowing economies and dampened consumer confidence hindered growth in Europe, which only rose 2.5 percent on an annual basis. North America, likewise, only saw price growth of 2.4 percent due to weaker growth in select Canadian and U.S. markets.
Looking at the last five years, key markets in the Middle East, Asia and the U.S. have seen particularly robust growth in response to several factors, according to Global Head of Research Liam Bailey.
“Over the past five years a number of markets have seen significant upwards repricing, with Dubai leading with a 147 percent rise,” Bailey said.
“This year’s second strongest market, Manila, has seen consistently strong growth over the same period with an 87 percent rise powered by an expanding economy and interest from expat Filipinos reinvesting in the city. It is the U.S., however, which had the biggest cluster of growth markets over this period. Palm Beach (117 percent), Miami (84 percent) and Aspen (73 percent) are the standout performers, where the strength of the U.S. economy and investment markets has fed through to substantial price rises.”
Interest rates have continued to be the primary factor holding back prime residential market performance, Bailey said.
“Even for prime markets, interest rates remain the key story,” Bailey said. “Rates are still very high in most developed markets compared with where they were as recently as 2022, but the past 12 months have seen central banks move decisively into a new era, with cuts outpacing rate rises for the first time in three years.
“While the direction of travel is positive for house prices and has supported the growth we have seen in over three-quarters of markets, the reduction in debt costs is still not sufficient to turn this into a trend in most markets. It will take additional rate cuts during 2025 to restore momentum.”
Low inventory in new builds is also putting a damper on some markets, including central London where new-build activity is down about 25 percent from the 10-year average, Knight Frank’s report noted. Other markets are also struggling with existing inventory, like in New York City where listing are down about 10 percent to 20 percent below the five-year average.
Canva
Investment shifts by family offices
Family offices across the globe continue to see real estate as a stable investment, according to a survey of 150 single- and multi-family offices Knight Frank conducted during November and December 2024 as part of The Wealth Report.
Those family offices surveyed were located in 29 cities in Asia, Europe, the Middle East and the Americas, with a strong presence in London, Singapore, New York, Geneva, Sydney and Hong Kong. The panel of offices surveyed included 121 single-family and 18 multi-family offices, as well as 11 leaders of “more diverse structures.”
Family offices surveyed managed an average of US$560 million, with about 40 percent of those offices running businesses with a focus on real estate within portfolios. Over the last 18 months, 28 percent of family offices increased their real estate investments as 17 percent reduced those real estate investments.
Looking ahead to the next 18 months, 44 percent of family offices surveyed said they plan to increase their exposure to real estate, Bailey said. Potential barriers to those investments that family offices cited include finding reliable partners (23 percent), challenging tax regimes (20 percent), competition for assets (19 percent) and regulatory and compliance barriers (17 percent).
The majority of family offices that manage private residential properties do so for the family’s personal use and legacy at 44 percent of family office respondents. Nearly 30 percent do so for capital preservation, 20 percent for diversification and only 7 percent to generate a potential rental income.
Baby boomers continue to be the main decision-makers in family offices, with 50 percent of offices surveyed citing members of this generation as making the ultimate call. After that, Gen X make up the largest share of decision-makers in family offices at 36 percent. Millennials make up the remaining leaders in family offices, and are a growing decision-making cohort.
Of those family offices surveyed, 58 percent have already started to loop the next generation into their investment strategy.
After looping them in, nearly 40 percent of respondents said there had been a change in investment strategy, with about 11 percent saying investment strategy had changed significantly. The survey shows that a growing number of millennials and members of Gen Z are playing a bigger role in family offices as they take up their family legacy.
Get Inman’s Luxury Lens Newsletter delivered right to your inbox. A weekly deep dive into the biggest news in the world of high-end real estate delivered every Friday. Click here to subscribe.
