Global luxury housing prices rose by an average of 3.2% in 2025, with 73 of the world’s 100 prime markets recording growth. Tokyo led the surge, posting a 58.5% increase in the value of new luxury apartments. At the same time, the purchasing power of $1 million (€852,000) has fallen in many prime destinations, including Lisbon. In the Portuguese capital, the amount of space that budget can secure has dropped by 14%, shrinking from 93 m² to just 80 m².
These are the main findings of the 20th edition of the annual Knight Frank Wealth Report, produced in partnership with the Portuguese firm Quintela & Penalva, which publishes the results of the International Prime Residential Property Index (PIRI 100). According to the report, 2025 marked the second consecutive year in which growth in prime property prices outpaced that of mainstream residential markets.
After Tokyo, Dubai recorded the next highest increase, with prime prices rising by 25.1%. The city also remained the world’s most active market for properties priced above US$10 million, registering 500 ultra-prime transactions. Regionally, the Middle East led performance with growth of 9.4%, followed by Latin America and the Caribbean (+4.7%), Asia-Pacific (+3.6%) and Europe (+3.3%), all of which posted steady gains. In contrast, North America recorded a decline of 0.9%, largely due to falling prices in Canada.
The purchasing power of $1 million falls worldwide
According to Knight Frank’s PIRI index, it is also possible to calculate how many square metres of prime property can be bought with US$1 million across the world’s leading markets. Over the past five years, there have been marked declines in purchasing power across most prime locations, particularly in Dubai (-66%), Tokyo (-41%), Miami (-40%) and Los Angeles (-28%). Significant reductions were also recorded in Geneva, Singapore and Milan.
By contrast, London (+7%) and Melbourne (+4%) saw modest gains in value over the same period, while Hong Kong remained broadly stable.
In Portugal, the amount of prime space that US$1 million can buy in the capital has fallen from 93 m² to 80 m², marking a 14% drop in purchasing power.
According to Carlos Penalva, founding partner of Quintela + Penalva | Knight Frank, “lower interest rates, heightened geopolitical instability and the shift from financial assets into tangible assets help explain both rising prices and stronger demand for real estate investment in Portugal.”
The official also cautions that the report points to a period of strong price growth across most global property markets, particularly in Portugal. He adds that limited supply, combined with sustained demand, is likely to bolster buyer confidence and continue pushing prices higher in this segment.
Globally, buying patterns are being reshaped by greater mobility among ultra-high-net-worth individuals (UHNWIs), many of whom now spend fewer than 90 days a year in traditional financial hubs. This shift is fuelling demand for ultra-prime rentals.
Emerging hotspots highlighted in the report include Mumbai (+8.7%), Brisbane (rapid growth in the luxury segment), Miami (+67% over five years) and Hong Kong, where the ultra-prime market is showing signs of recovery.
However, the main driver behind rising prices for turnkey properties remains simple: scarcity.
As Liam Bailey, editor of The Wealth Report, explains in his global commentary, “In many markets, prime residential real estate has diverged from the wider housing sector, underpinned by continued wealth creation. While mainstream markets remain exposed to broader economic pressures, the pace of wealth generation has helped keep demand for luxury real estate relatively resilient, despite recent volatility in financing costs.”
