The State of Luxury: Christie’s International Real Estate’s Regional Market Forecast

With market-leading affiliates spanning nearly 50 countries and territories, the Christie’s International Real Estate network has unmatched insight into key luxury destinations across the globe. To help inform our 2024 forecast, we surveyed those affiliates to inquire about their local market predictions. Here are the highlights: 

Following is a closer look at the state of luxury in eight high-end markets around the world. 

The United States  

San Francisco Bay Area  

The San Francisco Bay Area experienced a wave of tech layoffs beginning in 2022, and the sudden collapse of both Silicon Valley Bank and First Republic Bank sent additional shockwaves through the market last spring. Now another round of layoffs has hit some tech companies in early 2024. However, the long-term outlook for the sector is generally bullish amid the AI revolution. More tech firms are also getting on board with returning their workforce to the office.  

“We believe our area is at the forefront of another tech boom,” says Chris Trapani, co-founder and CEO of Silicon Valley-based Christie’s International Real Estate Sereno. As a result, Palo Alto and other areas close to the tech and employment hubs are expected to see a resurgence.   

Trapani says the Bay Area market is off to a fast start in 2024, with strong open house activity and multiple offer situations. In the months ahead, he anticipates rising prices outside of San Francisco and around Silicon Valley as demand continues to outstrip supply. “Hopefully this demand will meet some increased inventory,” which seems to be on the horizon given the number of listing appointments taking place. Home stagers and inspectors are also busy right now, he adds. 

While home prices in San Francisco proper have been impacted the most, Trapani expects prices to find their footing in the first half of the year. “San Francisco appears to be a great value, and we are already seeing more activity and interest,” he says, noting properties in the city are also seeing multiple offers at certain price points.  

New York 

The New York metro is a tale of two markets. In the suburbs of Westchester County, northern New Jersey, and Fairfield County, Connecticut, sellers have the upper hand due to a shortage of inventory. Suburban markets that typically have 150 homes for sale now have as few as 10, says Ilija Pavlovic, owner, president, and CEO of Christie’s International Real Estate Group in the tri-state area. He attributes this to homeowners’ reluctance to trade out of low mortgage rates. “People want to sell their homes, but not their mortgages.” 

Meanwhile it’s a buyer’s market in Manhattan. Pavlovic notes that Manhattan is less sensitive to interest rates, and because it is an international market, buyers are also affected more by global factors. The latter may bring more international buyers back to the Big Apple in 2024.  

“When there is geopolitical instability around the world, money often flows into the New York City market because it is the safest, most stable investment in global real estate,” he says. 

Manhattan will also benefit from the return-to-office movement, which is no surprise considering it houses 463 million square feet of office space. This comes at a time when more people are moving downtown, expanding their searches to East Village, West Village, Washington Square Park, the Financial District, and Tribeca. The Upper East Side is still a prime neighborhood, but it has more competition. “New York has more ‘good neighborhoods’ than ever before,” Pavlovic says.  

Dallas, Texas 

In Texas, luxury is driving the Dallas-Fort Worth market. “The higher the value, the more in demand the property is. Homes priced at $15 million and above are moving,” says Jerry Mooty Jr., owner and CEO of @properties Lone Star Christie’s International Real Estate.  

The most active luxury pocket is the area north of Dallas’ central business district, where luxury inventory is still at historic lows. One of the factors fueling demand is the fast-growing job market. The Dallas Morning News reported that in the last year, 19 companies relocated their headquarters to Dallas and surrounding areas like Frisco and Plano. Most of those companies made the move from California. In addition, the Metroplex now has the 2nd highest number of finance jobs in the U.S. behind New York City. 

Looking ahead, Mooty expects more demand and transaction activity following a slower end to 2023.  Investors, however, may not be as optimistic. Last June, the Dallas City Council voted in favor of banning short-term rentals like Airbnb and Vrbo in zoned residential neighborhoods. Since then, a Dallas County judge has temporarily blocked the city from enforcing the new ordinance. If it ultimately passes, Mooty notes it will affect upwards of 60% to 70% of the rental market.  

Still, the general sentiment on Dallas-Fort Worth real estate is very positive, with an industry report recently ranking it as the #2 market with the most pent-up demand. 

Europe 

The United Kingdom  

During the pandemic, the United Kingdom was one of many countries that experienced a “flight to rural” as buyers sought more space, better value, and quieter living. This led to a dramatic rise in home prices in markets such as Cornwall, Devon, Dorset, Norfolk, and Wales. 

Now, similar to the US, the UK is starting to see a reversal of this pattern as businesses encourage workers to return to the office.  

“This may result in homeowners moving back closer to their urban workplace, but at the very least we expect a reduced focus on rural and countryside locations,” says David Ruddock, head of residential sales operations for UK-based real estate consultancy Carter Jonas. “Urban centers are therefore expected to outperform in terms of price growth over the medium-term horizon.” 

Speaking of price growth, Carter Jonas’ 2024 outlook notes that while average home prices across the UK are projected to decline approximately 4.4%, they are still 21% above pre-pandemic levels. The report adds, “Demand is expected to rebound strongly, largely in line with anticipated interest rate reductions.”

Munich, Germany 

2023 marked a turning point for the luxury market in Munich following a run of insatiable demand coupled with low supply in 2022.  

“Interest rates have risen so far and so fast, that even affluent buyers consider financing to be expensive. They would rather rent and invest their money in high yield, low-risk investments,” says Markus Riedel, managing director of RIEDEL, Munich’s leading luxury brokerage.  

He adds that while there is still demand, sellers are reluctant to lower prices, causing transaction activity to slow significantly. One exception is the very top end of the market, where supply is so scarce that buyers are still willing to accept high prices to secure a unique property.  

In 2024, Riedel expects inventory and demand to be about the same as the year prior. In terms of location and property type, there will continue to be interest in large penthouses near the city center and villas in the sought-after neighborhoods of Bogenhausen and Nymphenburg.  

Paris, France 

Like many global real estate markets, Paris is feeling the impact of higher interest rates. Inflation in the eurozone peaked higher and later than in America, and throughout 2023, the European Central Bank continued to hike rates, raising its benchmark to a high of 4.5%. Subsequently, many of the city’s would-be homebuyers are renting, and sellers no longer have the advantage in the market.

Charles-Marie Jottras, CEO of Paris-based Daniel Féau Conseil Immobilier, notes that sales volume has decreased by 25% and home prices are down about 7%. “We have to wait out the first half of 2024 for sellers to accept the new interest rate environment,” he says. Once that happens, more inventory is anticipated. 

While it is a challenging landscape for buyers and sellers overall, the city’s high-end property market continues to be resilient. In a June 2023 post, Jottras emphasized, “With its historical landmarks, remarkable residential architecture, and unique atmosphere, Paris has lost none of its magic in the eyes of wealthy foreigners,” many of whom come from the United States, the Middle East, and China. “They see Paris as a city steeped in history, a symbol of luxury, and a hub for art and culture.”  

The Caribbean 

The Caribbean islands attract luxury buyers the world over with their pristine beaches, oceanfront estates, and host of tax incentives. In fact, the region accounted for three of the 10 highest-priced sales within the Christie’s International Real Estate network in 2023. 

Now, while demand is strong in many markets, there has been a noticeable slowdown overall, according to Danielle Austin, president of Christie’s International Real Estate Caribbean Affiliates. She notes that buyers and investors are likely weighing their options based on various factors, from rising insurance rates to the recent runup in home prices.  

When those investors do jump into the market, they will have exciting new opportunities.  “We are seeing a lot of development throughout the Caribbean,” Austin says. “The region as a whole is poised for significant growth.”  

This includes new luxury resorts such as The Loren at Turtle Cove in Turks & Caicos and Six Senses Grand Bahama in The Bahamas, among other opportunities that Christie’s International Real Estate Caribbean Affiliates will announce in 2024.  

Australia  

In Sydney, Australia, the luxury end of the market continues to be very robust, with demand outpacing supply. Darren Curtis, owner of Christie’s International Real Estate Sydney, attributes this to a surge of interest among overseas buyers, primarily those from mainland China. He expects this trend to continue in 2024.  

“Since the lifting of COVID restrictions at the beginning of 2023, Chinese buyers have returned to Australia in huge numbers and continue to spend money on securing prestige real estate. Many Chinese buyers deal in USD, so given the weak AUD, it has been a great time to invest in Australia,” he says.  

Curtis adds that Chinese buyers are not only drawn to Australia’s clean air, blue skies and water, but also its strong educational institutions. “This has been an ongoing pattern since 2012 and will only continue to get stronger.”  

For more trends and insights, read the 2024 Global Luxury Real Estate Forecast here.