The 2024 Global Luxury Real Estate Market

In the dynamic world of real estate, 2024 stands as a year of remarkable transformation. High-net-worth individuals are demonstrating unprecedented mobility, maintaining multiple residences and revaluating their investment perspectives in light of higher taxes, new government incentives, and the looming threat of climate change.?

The real estate industry is currently experiencing a significant shift towards digitalization.? This digital transformation is streamlining processes, making transactions quicker, more efficient, and accessible from anywhere in the world.

Top Performing and Emerging Luxury Real Estate Markets

Top Performing Luxury Real Estate Markets in 2023

• Dubai: Topped the list of luxury real estate markets, with prices expected to increase 13.5% in 2023.?
• Miami: Ranked second, with prices expected to increase 5%.
• Dublin, Lisbon, and Los Angeles: Followed with 4% expected increases.

Emerging Luxury Real Estate Markets in 2024

• Ras Al Khaimah City/Al Marjan Island, UAE: With a level of luxury on par with Dubai, but lower prices, Ras al Khaimah City is experiencing a real estate boom.?
• Park City, Utah, USA: Park City is emerging as a luxury real estate market.?
• Malta: Malta is attracting luxury investors with minimal taxes, low-threshold residency-by-investment programs, and highly desirable locations.?
• Nicaragua and Panama: These countries are also emerging as luxury real estate markets.

Current Trends in the Luxury Real Estate Market

The luxury real estate market is witnessing a nuanced evolution. Today’s buyers are blending emotional connections with more informed, strategic decision-making.?

• Technology Integration: With the rise of smart homes, luxury real estate is increasingly integrating cutting-edge technology. From automated lighting systems to advanced security features, tech integration is becoming a standard in luxury properties.?
• Sustainability: Sustainability is also set to impact the luxury market in 2024, as buyers are more inclined to invest in properties that meet high environmental standards. This includes energy-efficient appliances, solar power systems, and green building materials.?
• Curated Lifestyle: Another trend is the idea of a curated lifestyle, where buyers expect exclusive and tailored services. This can range from concierge services to private amenities like gyms and cinemas.?
• Location and Exclusivity: Location continues to be a significant factor in luxury real estate. Properties in exclusive neighbourhoods or with unique views (ocean, cityscape) are highly sought after.?
• Health and Wellness Features: Health and wellness have become a focus in luxury real estate. Features like indoor pools, spa facilities, and home gyms are becoming more common in luxury properties.?
• Space and Privacy: With the shift towards remote work, buyers are looking for properties that offer ample space for home offices. Additionally, privacy continues to be a priority for luxury home buyers.?

These trends reflect the changing preferences of luxury home buyers, who are looking for more than just a high price tag when investing in real estate. They seek properties that offer a blend of luxury, comfort, and modernity, aligning with their lifestyle and values.?

Comparisons in the Global Luxury Real Estate Market

Primary vs Secondary Market: In 2024, primary markets in the luxury real estate sector continue to be established cities with a significant amount of high-end properties. Secondary markets are often rapidly growing cities with increasing luxury real estate opportunities. The global luxury real estate market is expected to increase over the next several years, translating to a potential influx of luxury buyers and an increase in price points in high-end property markets around the world. The preference for primary markets versus secondary markets varies among buyers, but there is a growing interest in secondary markets due to their potential for growth.? ?

Off-Plan vs On-Plan: Off-plan properties in the luxury market often offer the opportunity for customization and personalization, which is attractive to many high-end buyers. These properties are typically sold before or during construction, often at a lower price than completed properties. On-plan properties, on the other hand, are those that are already under construction or completed. In 2024, there is a trend towards off-plan properties due to the potential for customization and the opportunity to secure properties at a lower price.? ?

Off-Market Listings vs On-Market Sales: In the luxury real estate market, off-market listings can offer privacy and exclusivity, which can be appealing to certain high-end buyers. These properties are sold without being publicly listed. On-market sales refer to luxury properties that are publicly listed and marketed for sale. In 2024, there is a resurgence of off-market listings, particularly in Dubai, due to the speed and efficiency of transactions.?

Cash Buyers vs Mortgage Buyers: In the luxury market, cash buyers often have an advantage as they can close deals faster and are seen as less risky from the seller’s perspective. However, mortgage buyers in the luxury market can leverage their cash for other purposes, such as investing. In 2024, there is a resurgence of cash buyers due to rising interest rates.

The Luxury Real Estate as the Investment?

Growth Rate: The global real estate sector is anticipated to grow at an annual rate of 3.41% (CAGR 2024-2028), resulting in a market volume of US$729.40tn by 2028. On the other hand, cities like Dubai and Sydney are expected to see the strongest growth in prime residential property values in 2024, continuing their momentum as top-performing luxury housing markets.?

Resilience: Luxury real estate often shows resilience during economic downturns. This is because luxury properties are often purchased by high-net-worth individuals who are less affected by economic fluctuations.? ?

Rental Profitability: Luxury properties can command higher rental rates, which can contribute to a higher ROI.? ?

Ease of Resale: Luxury properties, especially those in prime locations, often have a high demand, making them easier to resell.? ?

Long-term Investment Potential: Luxury real estate is often seen as a long-term investment. The value of luxury properties can appreciate over time, potentially offering a higher ROI in the long run.? ?

Exclusivity: The exclusivity and unique features of luxury properties can add to their value, potentially leading to a higher ROI.?

However, it’s important to note that the ROI can vary greatly depending on factors such as the location of the property, the state of the real estate market, and the specific features of the property. Therefore, potential investors should conduct thorough research and consider seeking advice from real estate professionals before making an investment decision.

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