Luxury homes - the ranking of cities where prices will grow the most in 2024

Rising inflation and the resulting increases in interest rates have dominated the charts in the first half of 2023. The prime residential markets have borne the brunt of the problem, but it is the sales volumes, not the prices, that are the main winners. According to Knight Frank, the prime residential markets are better protected from the evolution of monetary policies thanks to the higher percentage of buyers who use accounts, on a par with 46%. However, they are not immune. Price forecasts from December 2022 to today, however, are changed according to the changing macroeconomic scenario of the various countries.

1. Inflation and prime residential prices, how forecasts are changing
2. The cities where prime prices will grow the most in 2023
3. Prime residential prices, 2024 forecasts

Inflation and prime residential prices, how forecasts are changing

In general, despite the end of the era of low-cost financing, the increase in living costs and the negative forecast of the International Monetary Fund according to which "the advanced economies will struggle to overcome a growth in GDP of more than 1.4% between the end of 2024", the overall forecast for the growth in prime prices is only marginally lower, going from 1.9% to 1.7% between December 2022 and July 2023.

Knight Frank

Of the 26 cities monitored, six are predicted to have a better performance compared to what was forecast six months ago, nine are unchanged and the rest are predicted to have a slower growth.

The forecasts for Geneva and Vancouver are more favourable in percentage terms, while Berlin, Edinburgh, Dublin, Los Angeles, Zurich and Lisbon have seen the biggest deterioration, although rates remain relatively contained between 2% and 4%.

The cities where prime prices will grow the most in 2023

20 of the 26 cities monitored predict a sharp or positive increase in the price of luxury homes in 2023. Dubai is guiding the ranking of luxury home prices in 2023, even though the annual growth is expected to fall to 14%, down from 44% last year. Then Tokyo, Paris, Madrid and Miami, all predicted to grow by 4% in 2023, complete the top five positions.

In Tokyo, low interest rates and the growing interest from abroad continue to drive growth; in Miami, the low rates, the relative value and the demand from Latin America are the key factors. On the other hand, in Paris and Madrid, the lack of high-end property owners is mitigating the increase in prices, which is less pronounced than in the past.

Growth of around 3% for Vancouver, Geneva, Mumbai and Singapore, while New York, Shanghai and Lisbon are all around 2.5%.

A surprise, after so much immobility if not after price rises, for Florence, which has seen a growth of around 2%, at the level of Zurich, Los Angeles and Dublin. A little less for Monaco.

Prime residences located in Edinburgh, Berlin and London, which registered the most significant price increases, will see price increases in 2023.

Prime residential prices, 2024 forecasts

Luxury property prices should improve in 2024, with an average growth of 2%, excluding Dubai.

Knight Frank

Auckland and Mumbai are leading the forecasts for 2024, both destined to see growth of 5% over the 12-month period. Auckland is entering a recovery phase after seeing the prices of high-end property fall by 17% from the peak in the third quarter of 2021.

At the same time, in Mumbai, the increase in PIL figures, the relative value of the city and investments in infrastructure will push prices up, while in Singapore (4%) demand will continue to outstrip supply.

Madrid (4%), Paris (3%) and Dublin (2.5%) are expected to be the best performers, with luxury ownership and relative economic resilience underpinning the positive outlook. Florence also performed well, confirming price growth of 2% in 2024.