Luxury real estate is in a position that the rest of the housing market can only envy. While the mainstream housing market has faced some challenges, such as high mortgage rates and budget pressure, throughout 2025, the value of prime residential has outperformed the broader market.

This article looks at current luxury real estate trends, from the wealth transfer changing the buyer profile to the rising emphasis on wellness-led design and branded residences, and what the forecasts suggest for 2026 and beyond.

The Luxury Real Estate Market in Numbers

The luxury real estate market is not so much in a boom that it is resilient compared to other real estate classes.

Knight Frank's Prime International Residential Index, which tracks 100 luxury markets worldwide, recorded average price growth of 3.2% in 2025, which was slightly below the 3.6% in 2024. This number is nonetheless ahead of mainstream housing for the second year running. 73 out of the 100 tracked markets had prices increase.

Geographically, the fastest-growing markets are the Middle East (9.4% growth), largely attributable to Dubai, followed by Latin America and the Caribbean (4.7%), Asia-Pacific (3.6%), and Europe (3.3%). The only region in negative territory was North America, down by 0.9%.

If we look at a longer period of time, we see that luxury real estate has consistently outperformed other segments. Between 2020 and 2025, Tokyo and Dubai prices went up by 120% and 107%, respectively.

One reason why the luxury real estate market has a tendency to outperform the larger real estate market is that high-net-worth buyers are far less sensitive to interest rates and purchase properties with cash in a higher proportion compared to other buyers. Sotheby's has reported that in 2025, the share of all-cash purchases was on the rise in the higher end of the market.

Luxury Real Estate Market Trends in 2026

The luxury real estate market is seeing a plethora of interesting trends, both related to the new demographic of buyers as well as the concrete features that those buyers are looking for in 2026 and beyond.

Wealth distribution

Sotheby's International Realty estimates that roughly $6 trillion was passed down globally in 2025, which is the equivalent of about 10% of global GDP, in what is now the largest intergenerational wealth transfer on record.

Moreover, the number of people worth $10 million or more has grown 4.4% in a single year, between 2024 and 2025. The number of people worth over $100 million passed 100,000 for the first time.

Much of this inherited and redistributed capital is flowing into tangible assets such as real estate.

According to a 2025 Knight Frank survey, around 44% of family offices said they planned to increase their real estate allocation over the next 18 months, with a priority on luxury residential. Direct real estate already accounts for 22.5% of the average family office portfolio.

As a consequence of the wealth transfer, the buyer profile is also changing. Luxury real estate buyers are younger, the opposite phenomenon to what’s happening in the wider market, where the typical buyer has been getting older.

This has led to a change in how luxury is defined. Lifestyle considerations are now more important than address, which is what prestige has traditionally been linked to.

Wellness and longevity in Luxury Real Estate

While wellness used to be considered more of a premium add-on in the segment, it has become a baseline expectation in luxury real estate, in tandem with the overall growth of the wellness economy.

Modern aesthetic yoga studio with mats, balls and blocks set up

 

Buyers look for features such as air and water filtration, fitness and recovery spaces, and biophilic design. Moreover, amenities geared towards longevity are increasingly important, and the ability to ‘age-in-place’ has become an important decision-making factor in the most premium properties.

Wellness real estate as a category of its own has more than doubled in five years and is projected to surpass $1.1 trillion by 2029, and the wider longevity market $8 trillion by 2030.

Branded residences

Branded residences have experienced a surge since the beginning of the 2020s, and the trend is ongoing. These homes command a premium by being attached to a hotel or luxury brand (we now see car, fashion, and even silverware brands enter the market) and its service standards. According to Knight Frank, branded residences are projected to reach more than 1,000 live schemes worldwide by 2030.

This segment is attractive, as buyers are willing to pay a premium for privacy, high-quality amenities, hotel-grade service, and, as mentioned above, the promise of a certain lifestyle. According to this Savills report, the average global premium over comparable, non-branded assets is around 33%.

Luxury Real Estate Market Forecast: 2026 and Beyond

The near-term expectation is that the luxury real estate market will continue to outperform the broader housing market. The growth will be largely propelled by the concentration and transfer of wealth, as well as by increased international demand.

That said, growth will be uneven depending on the region. Markets with strong fundamentals, such as an investor-friendly regulatory environment or the much-coveted lifestyle appeal, are more likely to end up on the positive side of the growth curve.

Furthermore, it is always worth noting that the markets that are posting the most dramatic gains are also often flagged as the most exposed.

UBS's Global Real Estate Bubble Index 2025 ranked Miami as the world's highest bubble-risk housing market with a score of 1.73, followed by Tokyo at 1.59 and Zurich at 1.55. Dubai showed the strongest increase in risk out of all cities in the index. Keeping these numbers and the concentration of risk in mind is a useful hedge against over-optimism.

The main takeaway from current luxury real estate market trends is that the definition of what is considered a prime property is changing in a way where price and location are no longer the main constituents.

Service, wellness, specialized amenities, and community—in other words, lifestyle considerations—are weighing a lot more on the decision scale for luxury buyers.