Forecasting 2026 Market Trends in Global Luxury Real Estate

Moving into the final quarter of 2025 feels like a natural time to take stock of market trends heading into the new year. One segment I find especially fascinating right now is the luxury real estate market. 

Interest rate cuts are beginning to unlock pent-up demand, buyer and seller leverage is shifting, and preferences in design, sustainability, and technology continue to evolve. In this piece, I’ll look ahead to 2026 and share my perspective on how these forces may shape the market in the year to come.

Key takeaways:

• The pool of luxury real estate buyers is expected to continue expanding in 2026, driven by global growth in high-net-worth individuals.
• Traditional hubs like the US remain dominant, but markets such as Singapore, Dubai, and Mexico are gaining ground.
• Branded residences are expanding rapidly outside the US, especially in the Middle East, Latin America, and North Africa.
• Prime markets remain shielded from interest rate swings thanks to the prevalence of all-cash transactions.
• Broader global and political uncertainties remain the largest unknowns, shaping the backdrop for 2026.

Pool of luxury real estate buyers grows

Probably the safest prediction I can make about the luxury real estate market is that the pool of potential buyers will continue to grow in 2026. This has been one of the most consistent forces shaping the sector for years, and current data suggests the trend is far from slowing. Knight Frank Research reports that in 2024, the number of high-net-worth individuals (HNWIs) worldwide rose by 4.4%, reaching roughly 2.34 million; and the population of ultra-wealthy individuals is projected to grow by more than one-third over the next five years. This trend is also backed up by the more recent Global Wealth Report from UBS.

I expect this to translate into increasing demand for prime and super-prime homes.

What is especially notable is that the growth is not confined to any single region. In fact, all major regions saw an increase in their wealthy populations last year. The United States continues to lead in both the number and concentration of HNWIs, but Asia and Europe are close behind, each adding significant numbers of new wealthy households. Meanwhile, the Middle East, Africa, and Latin America also recorded meaningful gains, underscoring the truly global nature of this expansion. 

For luxury real estate, the widening distribution of wealth is giving rise to new demand centers alongside established hubs, reshaping the landscape of competition for high-end properties.

Most popular luxury hubs are shifting

While the global pool of wealthy buyers continues to expand, individual markets are not experiencing the same pace of growth. Some established hubs are consolidating their position, while others are losing momentum as new destinations rise.

The United States remains dominant, with cities like Miami and Los Angeles continuing to attract international capital as well as domestic buyers seeking tax advantages, lifestyle benefits, and stable property markets. In Europe, London has regained some of its draw after years of Brexit-related uncertainty, although high transaction costs remain a barrier. Meanwhile, Paris continues to benefit from its position as a cultural and financial center, helping it hold steady demand for luxury property.

By contrast, some Asian markets have seen uneven performance. Hong Kong, once a premier global luxury hub, continues to face headwinds from political and economic shifts, while Singapore has emerged as a strong alternative, drawing both private wealth and corporate relocations. 

Dubai also remains one of the standout performers, with record-setting sales driven by foreign investment, favorable regulations, and a business-friendly environment.

These shifts illustrate that while the global base of buyers is expanding, not all cities benefit equally. Local tax regimes, political stability, and lifestyle factors are increasingly decisive in determining which hubs rise and which lose ground in the global competition for luxury real estate investment.

Branded residences gain ground globally

Another trend reshaping the luxury real estate landscape is the rapid rise of branded residences — developments created in partnership with luxury hotel groups, fashion houses, or other lifestyle brands. Once a niche primarily concentrated in US markets, the model has expanded dramatically in recent years and is now gaining particular traction in the Middle East, Latin America, and North Africa.

The UAE leads the surge, with Dubai in particular becoming a global hub for branded residence projects that blend high-end design with strong investment appeal. Mexico has also emerged as a key market, leveraging its resort destinations to attract both international investors and second-home buyers. In Saudi Arabia and Egypt, government-led development initiatives are helping to establish branded residences as a cornerstone of new luxury districts, underscoring the appeal of this model in markets where large-scale urban planning is underway.

According to Knight Frank, the number of branded residential projects in the pipeline outside the US is now closing the gap with American markets. This reflects not only rising global wealth but also growing recognition among developers that brand partnerships can deliver both prestige and reliable demand. For buyers, these residences offer a combination of lifestyle, services, and perceived stability that is increasingly attractive in a competitive global market.

Prime market remains insulated from rate uncertainty

While interest rate movements will continue to shape the broader housing market, the impact on the prime and super-prime segments is likely to be muted. One of the defining features of the luxury sector is the prevalence of all-cash transactions, which reduces exposure to borrowing costs and insulates wealthier buyers from the volatility that affects middle- and upper-middle-tier markets.

Recent surveys of major global hubs, including Coldwell Banker’s The Trend Report, have shown that cash purchases account for a significantly larger share of prime deals than in the general market. This trend is expected to hold steady into 2026, providing a buffer against policy shifts and lending constraints. For high-net-worth and ultra-high-net-worth buyers, property decisions tend to be driven less by financing conditions and more by lifestyle, wealth diversification, and long-term investment strategies.

As a result, while rising or fluctuating rates may cool activity in mainstream segments, the top tier of the market is positioned to remain relatively resilient. For developers and agents operating in this space, the ability to market properties as a secure store of wealth may continue to outweigh concerns tied to monetary policy.

Global uncertainty remains a wildcard

Although the prime market is less vulnerable to interest rate swings than the broader housing sector, it is not immune to the larger forces that drive monetary policy. The global events prompting central banks to cut rates — ranging from geopolitical instability to uneven economic growth — shape the environment in which luxury buyers and investors operate. These are variables that no market segment can fully escape.

As Knight Frank’s Wealth Report notes, geopolitical tensions and policy uncertainty have become defining features of the global investment landscape. At the start of the year, with the Trump administration set to return, market expectations were rosy. Many anticipated a policy mix that would favor deregulation, lower taxes, and stronger business confidence. Instead, the year has unfolded quite differently, with markets confronting new uncertainties and a policy agenda that has not fully aligned with early assumptions. This shift has unsettled investors and underscored just how quickly sentiment can turn.

For luxury real estate, this underscores a broader truth: while wealth can provide insulation against immediate financial pressures, no market is fully detached from political decisions, economic volatility, or global shocks.

As 2026 approaches, the resilience of the luxury sector will continue to be tested not only by its internal dynamics — rising wealth, shifting hubs, new branded projects — but also by how well it weathers the uncertainty of the world beyond it.

Final thoughts

The luxury real estate market enters 2026 with strong fundamentals, including a growing base of wealthy buyers, diversification across global hubs, and expanding product types such as branded residences. These forces point toward resilience even as the broader housing market contends with shifting rates and economic headwinds.

At the same time, the sector is not fully insulated from the wider geopolitical and economic climate. As investors recalibrate to unexpected policy shifts and persistent global uncertainties, the true test for luxury real estate will be how well it can channel rising demand into sustained stability across its most important markets.