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In the ever-evolving world of wealth and investment, The Knight Frank Wealth Report is a critical barometer for understanding how the global elite are managing and growing their fortunes. The 2025 edition provides invaluable insights into global wealth distribution, luxury real estate trends, and emerging investment opportunities. For those in the high-end property sector, particularly in prime markets like Ibiza, the report offers a roadmap for where affluent individuals are putting their money and how real estate remains a key pillar of wealth preservation and growth.
The number of individuals with a net worth exceeding $10 million grew by 4.4% in 2024, reinforcing a strong upward trajectory despite economic uncertainties. North America remains the dominant hub for ultra-high-net-worth individuals (UHNWIs), but Asia is catchingup quickly, with Africa also emerging as a future wealth growth center. A significant trend in this year’s report is the continued wealth transfer from Baby Boomers to younger generations, with Millennial and Gen-Z investors prioritising sustainability, impact investments, and tech-driven assets.
Globally, luxury property prices increased by 3.6% on average in 2024, with resort destinations outperforming major cities. The Middle East and Latin America saw the most significant gains, while Europe’s growth was more subdued. Some of the fastest-growing luxury markets include Seoul (+18.4%), Manila (+17.9%), and Dubai (+16.9%), reflecting strong regional demand and economic momentum. In contrast, major global hubs like New York (-0.3%), London (-1%), and Hong Kong (-2.2%) saw slight price declines as they adjusted to post-pandemic economic shifts.
Real estate remains a cornerstone of wealth preservation, with over 40% of family offices planning to increase their property investments in the next 18 months. Investors are particularly interested in residential living sectors (rental properties, senior living, student housing), logistics and industrial spaces, and ultra-prime trophy homes. While global real estate transactions slowed in recent years due to rising interest rates, private capital is stepping in as institutional investment pulls back, signaling a renewed confidence in the property market.
Global GDP is expected to grow steadily in 2025, with the U.S. and select Asian economies driving much of the expansion. Inflation pressures are easing, and central banks are shifting towards interest rate cuts, which could re-energise the real estate sector by making borrowing more affordable. While some risks remain, such as geopolitical tensions and asset price volatility, Knight Frank’s outlook suggests a stable environment for wealth creation and property investment.
Beyond real estate, UHNWIs continue to diversify their wealth into alternative assets, though 2024 saw a –3.3% dip in luxury collectibles due to cooling demand in fine art (-18.3%) and rare whisky markets. However, investments in vineyards, classic cars, and high-end watches remain strong, particularly as the ultra-wealthy seek unique, tangible assets with lasting value. Sustainability is also becoming a major factor in luxury investment decisions, with younger investors prioritising eco-friendly developments, ESG-compliant properties, and impact-driven assets.
As a premier luxury destination, Ibiza continues to attract affluent buyers. In 2024, the island’s prime residential prices remained stable, rising by 0.7%, a sign of steady demand even as global markets fluctuate. While growth was modest compared to regions like Portugal’s Algarve (+5.6%) and Lisbon (+5.3%), Ibiza remains a key lifestyle and investment destination. Limited supply in the ultra-prime segment ensures continued demand for seafront villas and luxury estates, particularly among international buyers seeking Mediterranean retreats.
The Knight Frank Wealth Report 2025 paints a picture of resilience and adaptability in the world’s wealthiest circles. Real estate remains a preferred asset class, with investment shifting toward lifestyle-driven purchases, sustainable projects, and strategic growth markets. For Ibiza’s luxury property sector, the key takeaway is that demand remains strong, reinforcing the island’s status as a premier destination for high-net-worth individuals. As interest rates stabilise and global wealth continues to expand, expect the next few years to bring new opportunities for both buyers and investors in prime real estate markets.
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