Luxury apartment prices fell for the first time since 2009

The rise in rates and the economic slowdown that many countries are experiencing is already being felt in the real estate sector. Even the most exclusive homes are not spared. Thus, the data available from the consultancy firm Knight Frank reveal that the prices of luxury houses fell all over the world during the first quarter of this year. And it’s a big turning point, because it’s the first time they’ve lost ground since the financial crisis, fourteen years ago.

According to Bloomberg data, Knight Frank experts confirmed that prices fell by 0.4% in the first three months of 2023 compared to the same period in 2022. This represents a far-reaching change if you consider that in the fourth quarter of 2021, the prices of these goods recorded growth of more than 10% on average worldwide.

And there are areas that have suffered much more from the consequences. In New Zealand, for example, the price of luxury apartments has fallen by more than 27%, while San Francisco — which has seen years of brick-making booms fueled by the establishment of big-tech headquarters — has seen its most exclusive homes drop in cost by 10%.

“The slowdown in growth was largely driven by much higher interest rates after global monetary policy tightened significantly,” Liam Bailey, global head of research at Knight Frank, told Bloomberg.

Of course, there are some cities that continue to enjoy a healthy situation and where the most exclusive houses continue to increase in price in 2023. This is the case of Dubai, where prices have increased by 44%; or Miami, where they also grew by 11%.

Real estate experts expect the luxury housing market to experience significant downward pressure in the coming months. Of course, they are sending a message of calm because there are very few signs that the 2008 crisis could be repeated.

And Spain?

Spain has become one of the preferred options for high net worth individuals when it comes to buying residential property abroad. At least that’s what Knight Frank says in their report Wealth report. They rank the country behind the United States and the United Kingdom.

Australia and France are the other two countries to complete the list of the top five investment markets for the super rich. Buyers from the Middle East and Asia lead the way among those most likely to invest in, and even set up, holiday homes in these countries, with the healthcare, logistics, industrial and office sectors being their top investment targets in 2023, along with private rentals, hotels and free time.