Cities where luxury housing will rise in 2025: Madrid, Barcelona and Lisbon

Savills has released its forecast for the luxury real estate market in the world’s major cities for 2025. The property consultancy expects prime home prices to rise by just 1.6% this year, down from 2.2% in 2024.

Dubai is set to see the highest increase, with luxury property prices climbing by up to 10%, followed by Sydney, which is expected to rise by up to 6%.

Three Iberian cities – Madrid, Lisbon and Barcelona – rank among the top five for price growth, with increases projected between 4% and 6%. Cape Town rounds out the list, with a similar rise anticipated.

Hong Kong, London and Guangzhou, where the steepest decline will occur

Conversely, Savills predicts that luxury home prices will decline in several major global cities, including Hong Kong, London and Guangzhou, with annual drops ranging from 2% to 4%.

The consultancy attributes the expected downturn in Hong Kong’s luxury market to high interest rates, political uncertainty and the tariffs proposed by Donald Trump, which are likely to dampen demand. As a result, prices are forecast to fall even further than last year, when declines reached 4.2% in Shenzhen, 4% in Guangzhou and 2.4% in Hong Kong.

Meanwhile, London's price decline is attributed to the mortgage crisis, tighter restrictions on foreign investors and higher taxes on the wealthy. "The main reasons for falling prices in London are the removal of tax preferential tax status enjoyed by non-residents and the two percentage point increase in stamp duty," said Kelcie Seller, a researcher at Savills, as reported by Bloomberg.

San Francisco, Singapore and Shenzhen follow, with projected declines ranging between 2% and 0%.

Prices will remain the same in Genoa, Milan and Berlin

Luxury property prices in cities such as Genoa, Milan and Berlin, along with major locations like Los Angeles, Paris, Bangkok, Beijing, Seoul, Hangzhou, Athens and New York, are expected to see minimal changes this year, with increases of no more than 2%.

2024 prices: Hong Kong is the most expensive

This study also reveals the average price of luxury homes recorded in these major cities during 2024.

Hong Kong tops the list with €38,000 per m², followed by New York (€25,500 per m²), Genoa (€25,200 per m²) and Tokyo (€20,900 per m²).

Lisbon (€13,800 per m²), Madrid (€11,000 per m²) and Barcelona (€8,600 per m²) are ranked 20th, 25th, and 29th respectively, all below the global average of €14,800 per m².

In contrast, the cities with the most affordable luxury housing prices are Kuala Lumpur (€2,400 per m²) and Cape Verde (€2,500 per m²).

Madrid and Barcelona, where prices have increased the most

The city with the largest increase in rental prices is Madrid, the capital of Spain, with an annual rise of 9.4%, followed by Barcelona in second place, with an increase of 8.6%, which is joint with Tokyo.

Lisbon ranks seventh, with a year-on-year rise of 7%.