Here’s What’s in Store for the World’s Luxury Real Estate HubsDecember 27, 2023
Myriad uncertainties, from mortgage rates to national elections and the stock market, will have more impact than in typical years in major metropolitan housing markets from San Francisco to Sydney in 2024.
Miami emerges as a dazzling gem on the U.S. real estate map. According to the insights from Knight Frank’s prime cities report for the third quarter, the city witnesses a steady ascent in luxury home prices, an anomaly amidst a largely stagnant landscape. This momentum fuels an unwavering demand, with eager buyers often securing properties even before they grace the skyline. In essence, the allure of Miami’s pre-construction offerings has become the cornerstone of its real estate narrative.
For those with a penchant for waterfront opulence, 2024 promises to be a year of premium price tags. The unique charm and limited availability of single-family residences ensure that their value remains steadfast, with predictions hinting at an imminent ascent in the coming year. As more discerning buyers step into the arena, new property developments are primed to shatter existing pricing records.
While the fervor of the 2021-22 real estate zenith has somewhat mellowed, and both sellers recalibrate their expectations and buyers come to terms with elevated interest rates, Miami’s allure remains undiminished. The city’s property landscape continues its upward ascent, distinguishing Miami as a formidable contender that consistently eclipses its national counterparts.
The Los Angeles housing market is poised for a reset in 2024 following a challenging year. Prices experienced a nearly 2% year-over-year decline in the third quarter but rebounded by 6.7% in the second half of the year as interest rates fell. David Kramer, president of Hilton & Hyland/Luxury Portfolio International, noted increased activity toward the end of the year, especially in the upper end of the market. Falling interest rates are expected to rejuvenate both buyers and sellers. While Kramer does not foresee significant price growth in 2024, he acknowledges the potential for slight increases. Los Angeles buyers continue to be drawn to innovative projects and amenities that enhance their quality of life.
London’s luxury market had a subdued 2023 but showed signs of improvement as the U.K. narrowly avoided recession. Tom Bill, head of U.K. residential research at Knight Frank, anticipates a modest 2024 with no movement in prime central London prices. Political uncertainties, particularly around the 2024 U.K. general election, could influence the market. Proposed changes to taxes and the removal of certain breaks pose potential risks. Despite these challenges, London remains attractive to international buyers, providing a foundation for steady growth beyond 2024.
Dubai continues its luxury housing boom into 2024, solidifying its position as a global hub for high-value transactions. Oriol Font, CEO of Luxhabitat, anticipates further growth, citing Dubai’s appeal beyond work or tax reasons. While 2023 witnessed remarkable price growth, Font expects moderation or correction in 2024 or 2025. The city’s lifestyle offerings contribute to its attractiveness among high-net-worth individuals, ensuring its relevance in the luxury real estate market. Dubai has emerged as a significant destination for those seeking a unique and unparalleled lifestyle.
Sydney’s real estate market, despite continuous interest rate rises, experienced robust growth in 2023. However, data from CoreLogic indicates a slowdown in the upper quartile, with luxury home values showing the lowest rate of growth. Tim Lawless, chief economist at CoreLogic, suggests a potentially slower start to 2024 for luxury homes, influenced by interest rates. As rates may decrease in the second half of 2024, opportunities could arise for buyers seeking luxury properties in a less competitive market. The city’s high-end housing values may experience a temporary dip, presenting potential opportunities for buyers in the first half of the year.