Savills World Research shares that capital values for global cities are expected to remain in positive territory in 2025. Prime residential price growth of 1.6% is forecast across the 30 cities monitored by Savills in its World Cities Index, down from the 2.2% seen in 2024.

Dubai, Sydney and Madrid top the list and are projected to see growth between +4% to 9.9%.

Kelcie Sellers, Associate Director, Savills World Research says,“Despite the economic turbulence of recent years, prime residential markets have proved remarkably resilient. With 2024 dubbed the ‘year of elections’, 2025 looks to be a year in which these new governments start to make changes, from taxes to legislation to international affairs, each change has the potential for effects on prime residential property markets.”

As has been the case in recent years, prime buyers worldwide are prioritising lifestyle when purchasing residential property. Dubai, a perennial leader for capital value appreciation, is forecast to see the strongest growth in 2025 with anticipated prime price growth of +8% to 9.9% during the year. A market with growth supported by deliveries of new supply, capital values increased in the emirate by 6.8% in 2024. 

Sydney is anticipated to see strong growth but driven by a lack of supply rather than new supply. The persistent scarcity of luxury properties is expected to limit buying opportunities, continuing to drive prices upward. Coupled with sustained demand from domestic and international buyers and a relatively weaker currency, prime residential prices are anticipated to increase between 4% and 5.9% during 2025.  

Iberian locations are also predicted to see strong capital value appreciation over the course of the year, with Madrid, Barcelona and Lisbon forecast to see prime residential price increases of between 4% to 5.9%. Spanish cities saw the strongest capital value growth over the course of 2024, with increases of 9.4% in Madrid and 8.6% in Barcelona.

In the second half of 2024, the Beijing government frequently introduced and implemented favourable real estate policies to stimulate the real estate market. However, due to the previous market downturn across China, the average prices of prime properties still declined by varying degrees over the year as whole. As such, prices remain down in all five Chinese cities in the World Cities Index; Hangzhou (-1.4%), Beijing (-2.1%), Shanghai (-2.4%), Guangzhou (-4.0%), and Shenzhen (-4.2%). The outlook for 2025 is more positive with three of the five cities, Shanghai, Beijing and Hangzhou forecast to see capital value growth. 

Hong Kong has also seen declining capital values, down 2.4% in 2024, but remains the most expensive residential city market with average prices per square foot of US$3,860. A similar picture is anticipated for 2025 with prices expected to further decline by -2.4%.

Singapore saw a slight growth of 1.1% in 2024 – moving up four spots from 29th to 25th – with average prices at US$1,800 per square foot. Growth was slightly slower than 1.3% in 2023, but more positive than the -3.9% to -2% projected last year. The city state is expected to see a decline of -1.9% to flat capital value growth this year.

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore comments, “Capital values for luxury apartments in Singapore are expected to remain stable in 2025. However, because of the likelihood of greater exchange rate volatility, when expressed in US dollars, prices may swing either way.”

In Tokyo, a confluence of factors supported prime capital value growth of 8.6% over 2024. The supply of new for-sale condominiums is considerably lower compared to previous years, due to the limited availability of suitable land, and high construction costs and costs of labour. Demand for prime properties remains strong from domestic buyers and a growing number of international buyers, which has elevated prices with further growth of +2% to 3.9% forecast for 2025.

Savills World Cities Prime Residential Index: 2025 prime capital value growth forecast vs capital growth value in 2024

Across the United States, the mortgage rate movements that heavily influenced the housing market in 2024 are destined to play a major role once again in the coming year. A late-summer dip in rates gave a second-half tailwind to this year’s home sales as buyers and sellers took advantage of both the lower rates and increased confidence levels.

Capital values are forecast to tick up 0.7% on average over the course of 2025 for the four US markets in the World Cities Index, with Miami expected to see the highest appreciation of 2.5%, followed by New York City, and Los Angeles with growth of between 0% and 1.9% predicted. In San Francisco, as with its Chinese tech hub counterpart, Shenzhen, slight declines in capital values are forecast with falls of between 0% and -1.9%. While there does appear to be signs of stabilisation and growth in global tech markets, especially around generative AI and cloud computing, residential markets in these top tech locations haven’t seen green shoots emerge yet.  

By Kelcie Sellers, Associate Director, Savills World Research.