Knight Frank has unveiled its annual The Wealth Report 2024, which analyses trends and developments in the global luxury property market. Spain’s Marbella was again at the top of the list, characterised by an increase in sales of houses and flats.
About the luxury real estate market
This is the 18th edition of the summary, where experts look at how the global luxury real estate market is currently shaping up. According to experts, the report’s observations are crucial to better understanding the needs of affluent consumers who choose to purchase a home or flat in the world’s most expensive locations.
The publication has been compiled by research teams from around the globe. The Wealth Report analyses the most important real estate markets, while looking at how the global luxury market is changing. Experts also analyse investment opportunities in this market segment and trends in luxury and philanthropic spending.
Trends among affluent consumers
Much of this year’s list focuses on the creation of new centres of wealth around the world. Analysts agree that we are seeing ever-increasing demand in the luxury real estate sector, which – despite economic and geopolitical turmoil – is enjoying unwavering interest from wealthy clients. In addition, the number of cities with 'high-end’ flats and houses is increasing.
Some of the key factors determining the growth of the luxury home and flat market are the economic slowdown and geopolitical unrest. According to analysts, global GDP is likely to grow by around 2.9% in 2024, compared to 3.1% the year before. However, the resilience of the world’s largest economy, the United States, will be important in particular. What will dynamise the property market will be the likely interest rate cuts. This will facilitate access to credit and thus bring a recovery to the industry.
An important factor, changing the shape of the property market to date, will be the ageing population and demographic changes. The growing popularity of remote and hybrid working is also not insignificant, as is the green agenda that is beginning to dominate the policies of most countries in the world. At the same time, experts recognise the huge importance of artificial intelligence, which, by changing the global economy, will directly affect the property market. There will be a significant increase in demand for data centres, especially those located close to green energy sources. Flats and homes for IT professionals will then be in demand in their vicinity.
Marbella attracts wealthy customers
One of the important indicators presented on The Wealth Report 2024 is the Prime International Residential Index (PIRI 100). It includes an analysis of 100 real estate markets and shows that as many as 80 of them have seen growth or remained flat in 2023.
Manila (26%) ranked No. 1 on the list, but last year’s leader, Dubai, also saw significant growth at 16%. The global importance of the Asia-Pacific region is growing (3.8%), having overtaken the Americas (3.6%). The results of the analysis show that the experts were right – predicting that sunny locations would continue to outperform, growing by an average of 4.7%. In comparison, ski resorts lagged behind with 3.3%.
The Iberian Peninsula is again very high on the list. Markets from this area occupy five of the top 20 positions in the ranking. Marbella was ranked 13th with an increase of 7.2 per cent, and is also one of the key locations when it comes to second-home choice for those choosing to buy luxury properties.
Marbella and the Costa del Sol are attracted above all by the number of sunny days per year, the microclimate, the beautiful beaches and the picturesque views of the African coastline – described by tourists as a 'million dollar view’ for good reason. This makes one choose this city as their second, and often first, home. There is also the advantage of a high level of medical care or education – thanks to international schools – which is very important if you are moving here with your whole family.
At the same time, Marbella is not a typical tourist destination. The town is alive all year round and – unlike typical holiday destinations – does not close down after the season, thanks in part to the golfers. Its proximity to Seville and Granada and its ability to reach Madrid in 2.5 hours by high-speed train are other advantages of its location.
