The most recent projections from Knight Frank, partner of the Portuguese Quintela e Penalva since 2021, point to an average growth in the price of luxury properties, globally, of 2.4% in 2023 and 2.5% in 2024.

According to the annual assessment by the Knight Frank Research team, the forecast, compared to prices practiced in 2023, registered a significant improvement: with just one month to end the year, the projected value (average price increase of 1.7 %) rose to 2.4%.

Dubai leads the forecasts for 2023, with expected growth of 14%, followed by Madrid (6.5%), Stockholm (5%), Seoul (4.5%) and Miami (4%) – these markets are recovering from recent price drops or experiencing a strong migration of wealth.

If, on the one hand, Dubai is the leader in price forecasts for 2023, on the other, Auckland is at the top in 2024, with a 10% increase in luxury prices. Considering the 25 cities monitored, Dubai comes in third place, with growth of 5%, with Madrid (5%) and Stockholm (4.5%) being the European cities with the best projections. Lisbon is in the top 10, occupying tenth position with a growth forecast of 2.5%.

Cautious optimism

At the origin of this positive trend, we read in the most recent report from the English multinational, is cautious optimism, as buyers of luxury properties consider that economic risks are decreasing – on the demand side, highlighting inflation in retreat and the fact that the rise in interest rates is entering its final chapter.

According to Kate Everret-Allen, Head of International Residential Research, “some buyers of high-end products are confident that the worst is over. With inflation receding and the rise in interest rates entering its final chapter, it is already felt that the markets’ appetite is reinforced.”

Kate Everret-Allen also states that construction costs, the persistent shortage of labour and the risk faced by families when taking out credit for new housing is contributing to the lack of product on the market.

Also according to Knight Frank's annual forecasts, the percentage of ready buyers in first-class property sales increased from 46% to 52% in the last six months.

Another analysis takes into account the fact that elections are classified as the biggest potential risk for luxury markets in 2024, with the relaxation of tax and real estate regulations considered the biggest opportunity.

For Francisco Quintela, Partner at Quintela and Penalva l Knight Frank, said “the present Knight Frank research report points to the elections as a potential risk for the luxury residential market and, as a greater opportunity, the flexibility of administrative and fiscal processes, in order to make the real estate market more attractive for foreign investment. Nevertheless, despite the fact that the scenario in Portugal is still uncertain regarding new measures for the real estate sector, foreign investors continue to believe in our ability to attract investment and choose our country to live in”.