2025 Mid-Year Luxury Outlook Report

Economic uncertainties–especially stock market volatility–can create opportunities. For some people, this could be the moment they can catch a break in the storm of competition from other buyers, compared to just a few months ago.

The 2025 Mid-Year Luxury Outlook report highlights factors that influence the enduring importance of real estate as an asset class that contributes to the wealth of ultra-high-net-worth individuals as part of a diversified portfolio. Continued strong inventory in the upper end of the residential property sector, demographics that drive demand, and the resilience of the global housing market provide momentum even in the face of economic headwinds.

This report includes insights from Sotheby’s International Realty affiliated agents from around the globe, who specialize in transactions in the US$10 million and up price category, along with data and analysis from UBS, J.P. Morgan, Moody’s, McKinsey and Company, Bain and Company, Cotality (formerly CoreLogic), the National Association of REALTORS® and the National Association of Home Builders^®.

The content in the report incorporates insights into financing options for luxury buyers and dives into insurance needs of high-net-worth individuals for their homes and other assets, such as art and jewelry. The report also looks at paths to recovery for property markets after a natural disaster, such as the Los Angeles wildfires and earthquakes in Southeast Asia, as well as how homeowners navigate the decision to rebuild or relocate.

Finally, the report turns a sharp eye on five key markets with an emerging–or reemerging–luxury residential component: San Francisco, California; Salt Lake City, Utah; Puerto Rico; Saudi Arabia; and India. Each profile features informat ion about what’s driving the high-end property market in these locations, including new developments, growth in the high-end housing market and an appetite for luxury.

Global demand for luxury property is unlikely to slow, given that real estate is an investment that you can actually enjoy while you own it. That demand can be found among a diversity of family structures that acquire luxury property.

Sellers can consider enhancing their home’s appeal to homebuyers by investigating local regulations to see if a guest house can be added to increase versatility in living arrangements or accommodate a multigenerational family compound.

Investors seeking stability, whether in their own country or another, may be likely to consider real estate in the coming year in response to stock market volatility. In addition, currency fluctuations, which led to a surge of Americans buying property in the U.K. in 2024, will likely continue to drive cross-border purchasing.

On the supply side, the Sotheby’s International Realty brand anticipates growth at the upper end of the market from both new construct ion and existing properties. We saw an unprecedented level of transactions in 2020 and 2021 when some people were forced to make frenzied decisions. As we come up to the five-year mark after those purchases, and as things begin to normalize again, we anticipate a realignment in priorities that could trigger more sales.

Simultaneously, new development is redefining luxury in some unexpected places. Lifestyle-oriented markets continue to attract new upscale development and both local and out-of-state buyers.