Of the 100 luxury residential markets tracked, 80 recorded positive or stable annual price growth. Seoul, with an 18.4% YoY rise, led the rankings, overtaking Manila (17.9%), which slipped to second place after topping the list last year. Dubai (16.9%), Riyadh (16%), and Tokyo (12.1%) completed the top five.
Middle East and Latin America drive growth; Europe lags
According to the report, the strongest growth was recorded in the Middle East (7.2%) and Latin America and the Caribbean (6.3%), which significantly contributed to the overall improvement in annual price appreciation.
However, Europe lagged behind at 2.5%, impacted by high interest rates, slowing economies, and weaker consumer confidence. Similarly, North America saw subdued growth at 2.4%, largely due to weaker gains in Canada and parts of the US, including Miami, which slowed after a period of rapid growth.
Delhi & Bengaluru climb, Mumbai slips
Among Indian cities, Delhi ranked 18th, registering a 6.7% YoY rise in luxury residential prices, while Mumbai fell to 21st place, dropping 13 spots from last year. Bengaluru ranked 40th but climbed from 59th place in 2023, indicating an improving luxury market presence.
Commenting on the report’s findings, Shishir Baijal, Chairman & Managing Director, Knight Frank India, said: “Delhi and Bengaluru have demonstrated remarkable growth in the global luxury residential market, each surging by 19 ranks to secure the 18th and 40th positions, respectively. This underscores the growing appeal of these cities in the high-end real estate segment, supported by infrastructure expansion, economic growth, and increased demand for luxury properties.”
Also read: Mumbai’s real estate holds strong, but affordable housing is struggling
While Mumbai saw a decline in ranking, its prime property prices have risen by 30% over the past decade, nearly in line with the INR depreciation of 27%, he added.
Luxury property valuations and affordability
The report also assessed how much space can be purchased for $1 million. Monaco remained the world’s most expensive city, where $1 million buys just 19 square metres (sq m), followed by Hong Kong (22 sq m) and Singapore (32 sq m) in 2024.
In contrast, Mumbai offers 99 sq m for $1 million, though affordability has declined by 2.6% over the past decade. However, Delhi (208 sq m) and Bengaluru (370 sq m) have become more affordable, with prices declining by 11% and 9%, respectively, making them more attractive for global investors.
“Prime property price growth in Delhi and Bengaluru stood at 13% and 14%, respectively, making them more affordable for international buyers. With the US dollar strengthening, the relative affordability of these cities has improved in USD terms, enabling buyers to acquire more space compared to 2014. As prime international markets saw an average price increase of 3.6% in 2024, Indian cities continue to establish themselves as competitive players in the global luxury real estate landscape,” Baijal added.
Interest rates still a key factor
Providing a global perspective, Liam Bailey, Global Head of Research at Knight Frank, noted that despite the positive trend in luxury real estate, high interest rates remain a key challenge.
“Even for prime markets, interest rates remain the key story. While central banks have moved decisively into a new era, with rate cuts outpacing hikes for the first time in three years, the reduction in debt costs is still not sufficient to turn this into a trend in most markets. It will take additional rate cuts during 2025 to restore momentum,” Bailey said.
