Knight Frank’s Prime International Residential Index – the PIRI 100 – has tracked luxury residential price movements across the world’s leading markets for 20 years.
The 2025 results reveal a global prime market that is still growing but fracturing sharply along geographic and structural lines. Average figures flatter to deceive – the real story is in the divergence.
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1. Global prime is still outperforming mainstream
Luxury residential prices rose 3.2% on average in 2025, ahead of the 2.9% increase in mainstream global house prices. Prime’s structural advantage – lower reliance on mortgage finance, greater insulation from rate cycles – remains intact.
2. The Middle East is in a category of its own
Regional average growth of 9.4% was driven by Dubai’s 25.1% increase and 500 home sales above US$10 million – up from just 113 in 2021. Abu Dhabi is now emerging alongside it as a distinct, quieter alternative for UHNWIs who want the UAE’s economic advantages without the pace.
3. Tokyo is the outlier that demands explanation
A 58.5% annual increase – and 159.3% over five years – reflects a specific combination of new-build scarcity, persistently low domestic rates and strong inward demand from across Asia-Pacific. This is not a one-year anomaly.
4. Europe is splitting between cities and lifestyle markets
Traditional capitals are diverging sharply – Zurich up 4.6%, London down 4.7% – while lifestyle and second-home markets are where mobile capital is actually going: Méribel 9%, Marbella 8.1%, Prague 14.6%.
5. North America is the only region in negative territory
Canadian market weakness pulled the regional average to -0.9%, while the US picture is more nuanced – New York edging up, Miami softening after a stellar run, Aspen recording its third-highest annual sales volume on record.
6. Five years of buying power erosion
US$1 million buys 66% less prime floor area in Dubai than it did in 2020, 41% less in Tokyo, 40% less in Miami. Only London and Melbourne improved their value proposition over the period.
A View From The Super Prime
Three geographical tiers, three completely different investment theses – and the gap between them is only getting wider.
The headline figure does almost no analytical work. What the PIRI 100 actually shows in 2025 is a global prime market sorting itself into three distinct tiers – and the gap between them is widening:
The first tier: structural outperformers:
Dubai, Tokyo, Manila, Seoul, Prague. These markets share supply constraint, inbound capital momentum and buyers who are not rate-sensitive in the way mainstream purchasers are. They will continue to lead until supply catches up or capital flows redirect.
The second tier: lifestyle premium
Méribel, Marbella, Porto, the Cayman Islands. Our own coverage has tracked the behavioural shift driving these markets consistently – the move from permanent residency to strategic presence.
Buyers are not relocating to Marbella but buying Marbella alongside three other markets. The “dip-in, dip-out” model is not suppressing demand in lifestyle destinations either, but concentrating it, because buyers want assets they can use on their own terms without managing complexity.
The third tier: politically taxed hubs
London, Vancouver, Toronto, and the Chinese tier-one cities. It should be stressed these are not broken markets – London’s institutional depth is not in question – but are ones where the tax environment has become a structural drag on prime transaction volumes, and where buyer priorities have shifted from ownership to access.
The divergence is unlikely to close in the near term. The structural outperformers cannot switch on supply quickly, while the lifestyle tier has planning constraints and limited land. The taxed hubs have governments with no visible appetite to reverse course.
For buyers, that means the window to acquire in the first tier at current prices is narrower than it looks. For developers and advisers, it means treating the prime market as a single correlated asset class – as it largely was in 2019 – is now actively misleading.
