Decline in sales of expensive real estate: homes over 10 million globally

The impact of rising interest rates has affected all levels of the global real estate market, and the luxury real estate segment is no exception. In the second quarter of 2023, there were 422 sales of residential properties valued at more than $10 million in 12 cities analyzed in the Knight Frank Global Super-Prime Intelligence report. This number is 11% lower than the 475 sales recorded in the first quarter of this year and 13% lower than the 483 sales made in the second quarter of 2022.

However, in the last 12 months to June this year, there were 1,638 sales globally, well above the values seen before the pandemic (1,009 in 2019). Knight Frank's report looked at the cities of Dubai, Geneva, Hong Kong, London, Los Angeles, Miami, New York, Orange County, Palm Beach, Paris, Singapore and Sydney.

Despite year-over-year declines in global sales, four markets posted sales growth, led by Dubai (up 79% from Q2 2022 to Q2 2023), Sydney (up 46%), Paris (up 17%) and Geneva (up 7%).

"Premium real estate sales around the world are down from recent peaks but continue to exceed pre-pandemic levels. Dubai continues to lead the way, but London and New York still have healthy sales volumes. The main constraint in most markets in the near term is supply - the lack of new projects launched between 2020 and 2022 means that 2024 will be weak on new supply, leading to increased competition for existing properties on the market," comments Liam Bailey, global head of research at Knight Frank, quoted in the press release.

Portugal: a growing niche real estate market

Although no region in Portugal is on this list, the market called super-premium, which includes sales of properties worth more than 10 million euros, continues to experience increasing demand. Francisco Quintela of Quintela + Penalva, Knight Frank's partner in Portugal since 2021, explains why.

"The market with tickets above 10 million is considered a niche market in Portugal, but with a constant and increasingly demanding demand, especially for exceptional or collectible properties, as we call them, and in zones such as Comporta and Quinta do Lago, as well as in Lisbon, where Quinta da Marinha is a great example of consolidation and interest from international clients," he says.