According to a report by real estate consulting firm Knight Frank, luxury house prices in 2022 are expected to increase by 5.7% compared to 2021 in 28 big markets.

Luxury house prices are expected to rise 5.7% in 2022Luxury house prices are expected to rise 5.7% in 2022 / ph: pexels 

Cities such as Dubai, Miami and Zurich are expected to remain the market leaders in the luxury housing segment, with average house purchase price likely to increase by around 10% to 12%.

In 2021, Knight Frank’s luxury housing prices index (PIRI 100) has seen its biggest annual increase since this index was launched in 2008. Specifically, the index has risen 8.4% in 2021 while the same figure for 2020 is only 2%.

The index tracks 100 luxury housing markets globally, with 35% of cities seeing price increases of 10% or more in 2021. According to Knight Frank, buying demand is driven by various factors such as low interest rates, rising upper class, Covid-19 pandemic, etc. Only 7 cities tracked by Knight Frank have recorded a decline in luxury housing prices in the past year.

In the Asia-Pacific region (APAC) alone, luxury house prices increased by about 7.5% in 2021, largely driven by the Australian market.  Excluding the Australian market, luxury housing prices in APAC increased by 5.5%.

Houses with large spaces have become a hot topic during the pandemic.

Down Under, Byron Bay in the northern of New South Wales is seen as the luxury housing market with the highest expected growth over the next decade, with house values ​​expected to increase by 30% to 35%.  Meanwhile, London's Knightsbridge area is the luxury housing market most likely to depreciate over the next five years which is expected to fall between 25% and 30%.

Another highlighted trend is the difference in how the super-rich (UHNWI - a group of people with a net worth of 30 million USD or more) under the age of 40 invest in real estate. This group of people tend to invest in real estate markets around the world, prioritizing places that provide good services, open spaces, amenities as well as places for entertainment.

As of 2021, Knight Frank estimates that there are 129,557 people in UHNWI.  Of which, the majority is in North America (44,751 people), followed by the APAC region (44,565 people).

Additionally, the report also compares real estate purchase prices globally.  For example, 1 million USD will only be able to buy about 15 square meters of land in Monaco, while for the same amount of money, can buy 35 square meters of land in Singapore.  This shows that housing prices in Singapore are gradually narrowing the gap compared to the US, because 1 million USD can buy 33 square meters of land in New York.


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