🏘️ ❄️ Global Luxury Home Price Growth Slows but signs of Rebound are Emerging

🏘️ ❄️ Global Luxury Home Price Growth Slows but signs of Rebound are Emerging

The latest report from Knight Frank shows that global prime residential prices rose just 2.5 percent over the 12 months to September 2025, marking the slowest annual growth in two years. This slowdown reflects a broader cooling across many of the world’s most prominent luxury markets and suggests that the rapid growth seen in recent years is taking a pause.

Broader economic pressures are a major factor. Persistently high interest rates, combined with cautious expectations for future rate cuts, have softened demand at the upper end of the market. Buyers are becoming more selective, investment-driven purchasing has eased, and affordability constraints in already expensive cities are having a tangible impact on market activity.

Despite the overall slowdown, some markets continue to outperform. Tokyo is a standout, with existing-home prices climbing steadily. Limited supply, a weaker yen that enhances international purchasing power, and supportive local market conditions are all contributing to continued strength. Foreign investment remains robust, reflecting the city’s enduring appeal to global buyers.

Conversely, several major cities in mainland China are experiencing weaker demand for high-end properties. Policy priorities have shifted toward high-tech growth and domestic consumption rather than real estate expansion. As a result, luxury property sales are expected to remain subdued over the next nine to twelve months, with buyers exercising caution in line with national priorities.

Looking ahead, Knight Frank anticipates that global prime residential markets may regain momentum in 2026. As interest rates are expected to ease more meaningfully, the foundations for recovery are beginning to form. While a full rebound may not take shape until the first quarter of the year, the underlying conditions for renewed growth are emerging, offering optimism for buyers, investors, and developers alike.