Dubai is on track to become the world’s premier luxury real estate market by 2025, driven by significant growth in prime residential prices alongside cities like Seoul and Manila. According to recent property market forecasts, these cities have been key contributors to the rising luxury property values across 44 global cities in 2024.
Dubai Ranks Third in the Global Prime Cities Index
In Knight Frank’s global prime cities index, Dubai secured third place, with its luxury real estate market surging by 16.9% in 2024. Seoul led the index with an 18.4% increase, while Manila followed closely with a 17.9% growth.
Savills projects that luxury property markets in 30 major financial hubs, including Dubai, will grow by an average of 1.6% in 2025, building on a 2.2% increase in 2024. Dubai is expected to outperform other cities, with forecasts predicting a price surge of up to 10%.
Global Luxury Market Trends
The global luxury property market saw an average price growth of 3.2% in 2024, an improvement from previous quarters but still below the 20-year average of 5.3%. According to Knight Frank, 34 out of 44 cities recorded positive annual growth, with fewer than 20 experiencing price declines, indicating broad market resilience.
Seoul emerged as the top-performing market in 2024, with an 18.4% annual price increase, up from 4.6% in Q3. Tokyo’s prime market also rebounded, rising 10.6% in Q4, driven by a weakened Yen and Japan’s highest interest rates in 17 years, which attracted foreign buyers.
Liam Bailey, Knight Frank’s global head of research, noted: “The path to lower interest rates has become more complex due to persistent inflation in developed economies. However, further cuts in 2025 could unlock higher house price growth this year.”
Dubai’s Dominance in Luxury Real Estate
Dubai’s luxury housing market grew by 6.4% in 2024 and is expected to lead global markets with double-digit price appreciation in 2025. This solidifies its status as a top destination for high-end real estate investment.
Other cities projected to perform well include Madrid and Barcelona, where property values could rise by up to 5.9%. Madrid recorded the highest price increase among global cities in 2024, surging 9.4%, while Barcelona saw an 8.6% uptick.
Mixed Outlook for Asia and the U.S.
Asia’s luxury property market shows a varied outlook. Tokyo, Seoul, and Bangkok are expected to continue their growth trajectory in 2025, building on strong performances in 2024. Tokyo saw an 8.6% price increase, while Bangkok rose by 5.1%. However, mainland Chinese cities like Shenzhen and Guangzhou faced declines exceeding 4.0%, with further decreases anticipated.
In the U.S., cities like Miami and New York, which experienced declining luxury property prices in 2024, are projected to rebound in 2025. Miami may grow by up to 3.9%, recovering from a 1.2% decline, while New York’s luxury market is forecasted to rise by up to 1.9%.
Challenges for London and Hong Kong
London, which saw flat growth in 2024, is expected to decline by up to 3.9% in 2025, making it one of the weakest performers alongside Hong Kong and Guangzhou. As Dubai continues to thrive, it solidifies its position as the world’s most promising luxury residential market, outpacing other global cities in price growth and investor appeal.
