The global luxury real estate market entered 2026 with growth that is no longer evenly distributed among the world’s major cities.
The wealthiest buyers have not stopped investing in prestigious apartments, villas and residences, but they are now far more selective when it comes to location, tax environment, quality of life and properties that do not require additional renovation or complicated maintenance.
The latest The Wealth Report 2026 by Knight Frank shows that average prime residential prices increased by 3.2 percent during 2025. Growth was slightly slower than the 3.6 percent recorded a year earlier, but the premium segment outperformed the broader housing market for the second consecutive year. Of the 100 markets analyzed, 73 ended the year with higher prices, while 24 recorded declines.
Behind this seemingly moderate global average are enormous differences. While the most desirable locations in Asia and the Middle East delivered exceptionally strong results, several traditional markets in Europe and North America came under pressure from higher taxes, expensive financing and changing habits among international buyers.
Tokyo Is the Biggest Winner in the Global Market
The most dramatic increase in the latest PIRI 100 index was recorded in Tokyo, where luxury residential prices surged by an extraordinary 58.5 percent during 2025.
That does not mean Tokyo’s entire property market appreciated at the same pace. Growth was particularly pronounced in the segment of high-quality newly built premium residences, where supply remains limited while demand from wealthy domestic and international buyers continues to be exceptionally strong.
Tokyo now offers a compelling combination of safety, highly developed infrastructure, discreet luxury and architecture tailored to buyers who expect much more than generous square footage. Privacy, exceptional service, advanced technology and the ability to move into a finished residence without lengthy renovations are becoming increasingly important.
Tokyo’s rise also illustrates how the geography of global luxury is changing. Cities once regarded primarily as business and financial centers are increasingly becoming long-term bases for the world’s wealthiest individuals and their families.
Dubai Remains the Capital of Ultra-Luxury Transactions
While Tokyo leads in terms of price growth, Dubai remains one of the world’s most powerful and active markets for ultra-prime property.
During 2025, an impressive 500 residential properties worth at least $10 million were sold in Dubai. In the final quarter alone, 143 transactions were completed in this price category, confirming that demand for villas, penthouses and residences in the city’s most exclusive locations shows little sign of serious slowdown.
The total number of residential transactions reached a record 205,400, representing an 18 percent increase compared with the previous year. Their combined value rose by 25 percent to AED 544.2 billion, while prices in the premium segment exceeded AED 4,300 per square foot.
Dubai no longer attracts buyers solely through spectacular developments and boundary-pushing architecture. Its advantages also include its tax environment, global connectivity, political stability, luxury services and rapidly expanding selection of branded residences.
Properties offering a level of service traditionally associated with five-star hotels are particularly desirable, including private concierge teams, maintenance, security, wellness facilities, restaurants and direct access to beaches or marinas.
Abu Dhabi Emerges as a More Discreet Alternative to Dubai
Knight Frank highlights Abu Dhabi as an increasingly attractive market for ultra-high-net-worth individuals seeking a quieter, more discreet and less conspicuous lifestyle.
Unlike Dubai, whose identity is closely associated with spectacular skyscrapers, major events and highly visible luxury, Abu Dhabi is positioning itself as a sophisticated alternative with a greater emphasis on privacy, culture, spacious residences and long-term quality of life.
The development of cultural institutions, private island villas and exclusive residential projects has enabled the UAE capital to attract families, entrepreneurs and business owners looking for a stable base in the region without the intensity of everyday life in Dubai.
Asia Records Strong but Highly Uneven Growth
The Asia-Pacific region recorded average luxury residential price growth of 3.6 percent, although individual markets delivered dramatically different results.
While Tokyo experienced a spectacular surge, luxury property prices in Hong Kong declined by 2.1 percent during 2025. Nevertheless, the final months of the year brought a strong recovery in ultra-prime activity: 81 transactions worth at least $10 million were completed in the fourth quarter, making Hong Kong the second strongest market after Dubai by this measure.
Singapore continued to set new price records, although transaction volumes remained constrained by high taxes and additional duties imposed on foreign buyers. Mumbai, meanwhile, is becoming increasingly important thanks to the rapid creation of private wealth in India.
A very different situation emerged in parts of mainland China. In Guangzhou, luxury residential prices fell by 12.2 percent, reflecting weaker buyer confidence and the continuing adjustment of the Chinese housing market.
Europe Attracts Capital Leaving Traditional Centers
Europe has not lost its appeal among luxury property buyers, but capital is moving between cities much faster than before.
London remains one of the world’s most important centers of wealth, business, education and culture, although changes to tax rules are influencing the decisions of its wealthiest residents. Some buyers are reducing budgets, delaying purchases or choosing luxury rentals instead of ownership.
That does not necessarily mean wealthy individuals are abandoning London. Increasingly, they are using the city as a temporary base for business meetings, social events and shorter stays rather than as their sole residence. This lifestyle is supporting demand for smaller, impeccably finished residences in central locations, as well as exceptionally expensive rental properties.
At the same time, Milan and Madrid are attracting international capital seeking a more favorable combination of lifestyle, culture, climate and taxation. In the second-home segment, strong demand continues in Marbella and the French Alpine destination of Méribel, where luxury properties are increasingly regarded as long-term family assets to be passed from one generation to the next.
North America Is the Only Region in Negative Territory
North America was the only major region to record an average decline in luxury residential values, largely due to weakness in Canadian markets.
Vancouver and Toronto remained under pressure from high borrowing costs, while buyers became more cautious amid expensive mortgages and slower sales.
New York nevertheless recorded modest price growth, accompanied by a pronounced shortage of high-quality, fully finished homes that buyers can move into immediately. Miami saw a slight decline after several years of exceptional growth, while Aspen recorded the third-highest annual sales volume in its history.
Los Angeles faced weaker liquidity in the super-prime segment, partly because of the tax known as Measure ULA, which applies to high-value property transactions. For international buyers, this is another reminder that taxation and regulation are becoming just as important as views, location and square footage.
Wealth Continues to Grow Despite Global Uncertainty
The resilience of the luxury property market is closely linked to the rapidly expanding population of exceptionally wealthy individuals.
According to Knight Frank’s model, the number of people with wealth exceeding $30 million increased from 551,435 in 2021 to 713,626 in 2026. That means 162,191 people joined the global ultra-wealthy population in just five years – an average of 89 new individuals every day.
North America accounts for approximately 37 percent of this population, the Asia-Pacific region for almost 31 percent and Europe for slightly more than 25 percent. India recorded a 63 percent increase in its ultra-wealthy population between 2021 and 2026, rising from approximately 12,000 to nearly 20,000 people.
The increasingly global distribution of wealth is having a direct impact on real estate. Buyers are no longer tied exclusively to London, New York, Paris or Hong Kong, instead organizing their lives and assets across several cities, often on different continents.
The Wealthiest Buyers Want Hassle-Free Homes
One of the defining trends of 2026 is growing demand for completely finished, professionally managed residences.
Ultra-high-net-worth buyers are increasingly reluctant to accept the risks of renovation, years of construction work or the complexity of managing large households. Properties offering finished interiors, privacy, security and professional maintenance therefore tend to sell faster and often command a premium.
This is precisely why branded residences continue their global expansion. Knight Frank estimates that more than 1,000 such projects could be operating worldwide by 2030.
Buyers are willing to pay more for homes associated with established hotel, fashion or automotive brands because they promise a standardized level of service, privacy and quality.
Luxury Rentals Become a Serious Alternative to Buying
Changes in tax policies and the increasing mobility of the wealthy are also fueling the growth of the super-prime rental market.
Instead of purchasing a large residence in every city where they occasionally spend time, affluent individuals are increasingly renting fully furnished apartments and houses for several weeks or months. This allows them to retain freedom of movement while avoiding high taxes, transaction costs and long-term maintenance obligations.
The trend is particularly visible in London, New York, Milan, Miami and Singapore – cities that remain important business and social destinations but are no longer necessarily the only or permanent addresses of the world’s wealthiest people.
In 2026, Luxury Real Estate Is About More Than a Prestigious Address
The latest data suggests that a luxury property is no longer attractive simply because it occupies a prestigious address. Buyers increasingly consider the complete picture: tax obligations, political stability, quality of education, healthcare, international connectivity, privacy and access to professional services.
Tokyo stands out for its limited supply of high-quality new developments, Dubai for the sheer volume of ultra-luxury transactions, Abu Dhabi for its more discreet lifestyle, while Milan and Madrid are benefiting from changes affecting traditional European wealth centers.
The global luxury property market in 2026 is therefore no longer simply a race to achieve the highest price growth. Instead, it reflects a much broader redistribution of wealth, capital and lifestyles – one in which the winning cities are those capable of offering security, service, mobility and genuine quality of life at the same time.
