Investment volumes have fallen since the 2021 peak. However, private investors are still showing strong demand for property.
Knight Frank’s The Wealth Report reveals that family offices hold 22.5% of their portfolios in real estate. Over 40% plan to increase their real estate investments over the next 18 months. They are particularly interested in housing, logistics, and luxury homes.
Growing Interest in Luxury Markets
Family offices are not only expanding their portfolios but also looking to acquire new properties. Nearly a quarter of those managing private residential portfolios are considering new acquisitions. This trend is expected to lead to price growth in luxury markets, particularly in 2025. For example, London offers significant savings for dollar-based buyers compared to 2014. But many markets have seen their buying power drop by over 50% in recent years.
Africa: The Emerging Wealth Hub
Africa is becoming a key player in wealth creation. More people are joining the $10 million-plus wealth group. The continent’s young population, abundant resources, and better infrastructure position it for future wealth growth. While North America and Asia remain key wealth centers, Africa is growing in influence.
The Transfer of Wealth to Younger Generations
Wealth transfer from baby boomers to younger generations is underway. Younger investors are shifting how wealth is managed. They focus more on sustainable and responsible investments. Despite changes in global policies regarding Environmental, Social, and Governance (ESG) issues, sustainability remains a priority for them.
Property Developers Adjusting to New Demands
Developers are adjusting their strategies to meet the demands of wealthy consumers and workers. They are adopting new methods to attract and retain top talent. The rise of online luxury sales and major auctions is also highlighted in the report. These trends are reshaping how luxury markets operate.
Climate Change and Luxury Investments
Climate change is influencing the decisions of the wealthy. Luxury markets, such as those for vineyards, yachts, and prime real estate, are responding to new environmental concerns. Sustainability and climate resilience are becoming key factors for future luxury investments.
Challenges in Luxury Collectibles Markets
Luxury collectibles faced challenges in 2024. On average, values fell by 3.3%. Art, wine, and whisky markets saw more significant declines. Despite these issues, younger generations are still shaping the future of wealth, luxury, and real estate. They are focusing on sustainability and long-term value.
