Despite a fall in investment volumes from the 2021 peak, there is an ongoing desire for property from private capital, according to Knight Frank’s The Wealth Report.

While direct real estate ownership already accounts for 22.5 per cent of the typical family office’s portfolio, more than four in 10 are looking to grow this allocation over the next 18 months, led by the living, logistics and luxury residential sectors.

In addition to this desired expansion of investment portfolios, nearly a quarter of family offices that manage private residential portfolios are considering new acquisitions. These requirements are set to feed through to positive price growth in key luxury residential markets in 2025.

Changes in market pricing and currencies have shifted the landscape of luxury property. The Wealth Report confirms that while London offers savings of 43 per cent for dollar-based buyers compared with pricing in 2014, other markets have seen equally dramatic falls in relative buying power, with some weakening by more than 50 per cent over the period.

Africa is emerging as a growth hub for wealth creation, with an increasing number of individuals joining the $10 million-plus wealth club. Although North America and Asia remain central to global affluence, Africa’s young population, rich natural resources and improving infrastructure position it as a future leader in wealth generation.

Baby boomers still control most global wealth, but the transfer to younger generations is well underway. This year’s Next Generation Survey and the Knight Frank 150 survey of family offices both highlight future wealth and investment priorities. Despite the United States administration’s pivot away from Environmental, Social, and Governance (ESG), we expect the focus on purposeful and sustainable investment will continue to grow as younger generations make their mark.

This year’s Wealth Report also explores the techniques used by property developers to attract and retain the world’s most valuable workers and consumers, examines the rising power of online luxury sales, highlights the big collectible sales of the year, and describes what the billionaire of tomorrow will look like.

This year’s Wealth Report also explores the techniques used by property developers to attract and retain the world’s most valuable workers and consumers, examines the rising power of online luxury sales, highlights the big collectible sales of the year, and describes what the billionaire of tomorrow will look like.

There are concerns about climate change increasingly influencing the decisions of the wealthy, impacting everything from real estate to luxury investments. Vineyards, yachts, and prime residential markets are being reshaped by changing weather patterns and environmental concerns. Sustainability and climate resilience are defining the future of luxury markets and commercial real estate.

According to the report, luxury collectibles markets underperformed in 2024.

“Our roundup of luxury collectible performance reveals that values for a basket of 10 leading assets fell by an average of 3.3 per cent in 2024. The art market underperformed, with values down by 18.3 per cent, while wine and whisky also contributed to pulling our overall luxury index into negative territory,” the report said.