The average growth in the price of luxury real estate globally is expected to be 2.4% in 2023 and 2.5% in 2024. These are the latest projections from Knight Frank, a partner of the Portuguese firm Quintela e Penalva. Lisbon appears in the top 10 of the best performing markets for this year.
According to the Knight Frank Research team's annual assessment, the forecast for prices in 2023 has improved significantly: with just one month to go until the end of the year, the projected figure (average price increase of 1.7%) has risen to 2.4%.
Dubai tops the forecasts for 2023, with an expected growth of 14%, followed by Madrid (6.5%), Stockholm (5%), Seoul (4.5%) and Miami (4%) – these markets are either recovering from recent price falls or experiencing a strong migration of wealth.
Lisbon occupies 10th position with 2.5% growth forecast
Auckland is at the top in 2024, with a 10% increase in luxury prices. Considering the 25 cities monitored, Dubai is in third place, with a growth of 5%, while Madrid (5%) and Stockholm (4.5%) are the European cities with the best projections. Lisbon is in second place with a growth forecast of 2.5%.
At the root of this positive trend, according to the most recent report by the British multinational, is a "cautious optimism", since luxury property buyers consider that the economic risks are diminishing. Even so, supply remains limited in many cities.
Kate Everret-Allen, Head of International Residential Research, points out that "some buyers of high-end products are confident that the worst is over"; and with inflation receding and interest rate rises entering their final chapter, it is already felt that the markets' appetite is strengthening. Kate Everret-Allen also points out that construction costs, the persistent shortage of labor and the risk of households taking out credit for new housing are contributing to the lack of product on the market.
According to Knight Frank's annual forecasts, the percentage of cash buyers in sales of first category properties increased from 46% to 52% in the last six months. The elections are classified as the major potential risk for the luxury markets in 2024, with the easing of tax and real estate regulations being considered the biggest opportunity.
Francisco Quintela, Partner at Quintela e Penalva l Knight Frank, says: "This Knight Frank research report points to the elections as a potential risk for the luxury residential market and, as the greatest opportunity, the easing of administrative and fiscal processes, in order to make the real estate market more attractive to foreign investment."
The Knight Frank research report points to the elections as a potential risk for the luxury residential market and, as the greatest opportunity, the easing of administrative and fiscal processes, in order to make the real estate market more attractive to foreign investment.
He also adds that "despite the fact that the scenario in Portugal is still uncertain as regards new measures for the real estate sector, foreign investors continue to believe in our ability to attract investment and choose our country to live in".