This Year’s Luxury Real Estate Surge Anticipated to Be Fueled by Affluent Millennials and Single Women.
The 2025 Luxury Outlook report from Sotheby’s International Realty indicates that the global luxury real estate market is likely to reach a state of stability.
“We do not foresee a decrease in property values for 2025, but the rate of growth might be slowing down,” states Bradley Nelson, the chief marketing officer who directed the report. “Our comprehensive survey of leading agents worldwide reveals a growing sentiment of market stability and balanced conditions,” although significant underlying dynamics in the market persist.
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Primarily, wealthy individuals are relocating. The SIR report references a study by Henley & Partners forecasting that 135,000 high-net-worth individuals are expected to move to new countries in 2025, an increase from 128,000 in 2024. The United Arab Emirates is shaping up to be the leading destination, having welcomed a record 6,700 new wealthy residents in 2024, with expectations of more arrivals.
“It’s a magnet for wealth,” Nelson points out, noting the trend of individuals migrating from the UK, Europe, and elsewhere. Attractive factors include tax benefits, golden visas, and the desirable lifestyle in particular UAE locations—especially Dubai. Branded residences are particularly sought after. “These properties can demand premiums over 25% for similar size and quality compared to unbranded options,” observes Chris Whitehead, managing partner of Dubai Sotheby’s International Realty, as stated in the report.
Conversely, while the US experienced the second-largest influx of affluent homebuyers last year, it simultaneously recorded the lowest international buyer engagement since 2009, according to SIR. From April 2023 to March 2024, these buyers purchased merely 54,300 homes totaling $42 billion, a notable decline compared to 2017 when foreign transactions reached $153 billion with 284,500 properties sold.
Nevertheless, Nelson remarks, “some high-value transactions still occurred within this segment, signifying their ongoing importance in the ultra-prime real estate market.”
In the US, the recent catastrophic wildfires in Los Angeles, which devastated around 12,000 structures—including many expensive single-family homes—are expected to have no immediate market repercussions. “The LA fires are a tragedy, especially at a personal level,” Nelson notes. “However, it is too soon to evaluate the impact on the real estate market. Most displaced families are currently focused on finding immediate housing solutions.”
This year may see a rise in foreign investments nationwide. Nelson continues, “Stable inventory levels usually make purchasing more attractive, especially for buyers from abroad. If properties are selling in just hours or days, it becomes nearly impossible for international buyers to view new listings.”
Changing Buyers
The profile of buyers is changing. As millennials are increasingly entering the luxury market, their perspective sharply contrasts with that of previous generations. “Their focus is on a lifestyle-driven approach,” says Nelson.
Practically, brokers around the world are observing a trend among younger buyers leaning towards aesthetically appealing, historic properties that are often influenced by pop culture.
For instance, in Italy, the report discusses “The White Lotus Effect,” as noted by Diletta Giorgolo Spinolo, head of residential at Italy Sotheby’s International Realty. After the HBO series showcased beautiful historic villas, she noticed a doubling in interest from American and British buyers. She speculates that “younger generations value owning a piece of history as a status symbol. Television has certainly shaped their understanding of luxury.”
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In addition to changing preferences, these younger buyers are employing different purchasing strategies than their predecessors. “Currently, some agents report that 75% to 90% of their sales volume comes from Instagram,” Nelson adds. “It’s remarkable to see how client relationships have transformed over just five years.”
Investment Trends
While the profile of luxury buyers may be evolving, the source of their financial support largely remains the same: affluent buyers often seek assistance from their parents.
The SIR outlook references a report by the UK financial services company Legal & General, which revealed that 42% of properties bought by individuals under 55 in the UK were financed by their parents. Paloma Pérez Bravo, CEO of VIVA Sotheby’s International Realty in Spain, has also noted this trend. “Individuals from various parts of Latin America, including Mexico, Venezuela, and Miami, are helping their adult children explore opportunities in Madrid,” she indicates.
Furthermore, the gender dynamics among homebuyers are shifting. Nelson cites research from the National Association of Realtors, which found that in 1981, 11% of homebuyers were women, and couples accounted for 73% of the market. By 2024, women represented 20% of buyers, while couples composed 62% of the market.
“Single female buyers are becoming confident and motivated to purchase properties independently of their romantic partnerships,” adds Nelson. “They recognize the wealth-building potential inherent in real estate.” This trend extends beyond younger women; “older single women are also downsizing into homes more aligned with their needs,” as noted in the SIR report.
“Ultimately,” concludes Nelson, “this report underscores demographic shifts as fundamental influences on the evolving market. This became apparent throughout our analysis.”
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