Global wealth keeps evolving in response to political shifts, economic challenges, and emerging investor priorities. Luxury investment patterns are changing in step with new demographic and generational forces.

The 2025 edition of The Wealth Report by Knight Frank, now in its 19th year, offers a comprehensive analysis of these dynamics, with a particular focus on prime property markets and private capital trends. The report explores how high-net-worth individuals (HNWIs) are adapting their strategies and how real estate is playing an increasingly central role in wealth preservation and growth. The World Luxury Chamber of Commerce highlights the main takeaways.

One of the central themes of the 2025 edition is the enduring appeal of real estate as a core asset class among wealthy individuals and family offices. Based on Knight Frank’s survey of 150 family offices, nearly half intend to increase their allocation to property over the next 18 months. Commercial real estate is a primary focus, though residential assets remain highly sought after. However, market barriers persist: limited inventory in key cities, regulatory constraints, and elevated borrowing costs are complicating acquisition strategies.

Despite these challenges, investor demand remains firm. In London, for example, occupiers seeking large office spaces are facing multi-year waits, reflecting a mismatch between availability and demand. In the residential sector, all G20 nations have fallen short of their housing supply targets, placing upward pressure on both prices and rents. This shortfall has made the living sector increasingly attractive for private capital.

The United States continues to dominate in terms of wealth generation. Nearly 40% of individuals with a net worth above US$10 million reside in the U.S. However, emerging regions are also gaining ground. Africa, although smaller in absolute wealth, is showing signs of robust growth thanks to its youthful population, natural resources, and infrastructure development. Asia remains a major force, with strong gains in China and India contributing to a global rise in high-net-worth populations.

The report also draws attention to generational change. A new wave of younger, affluent individuals is reshaping investment preferences. Health, wellness, and meaningful experiences are taking precedence over material accumulation. Stocks, real estate, and cash remain the dominant investment vehicles, but there is growing curiosity around digital assets, collectibles, and impact-driven ventures.

Macro-level risks are still influencing investment behavior. Inflation, although moderating, continues to affect policy and lending environments. Trade tensions (particularly those involving the U.S.) have introduced new uncertainty. In parallel, national debt levels across developed economies are triggering debate about fiscal sustainability. Despite these headwinds, markets have remained resilient, supported by expectations of eventual rate cuts and continued technological optimism.

Luxury investments also saw mixed performance, with art and whisky markets underperforming. However, real estate and select alternative assets continue to attract investor interest as tangible stores of value. Knight Frank’s research points to price gains in key prime residential markets in 2025, driven by constrained supply and growing demand.

Urban mobility and flexible work arrangements are also having a noticeable impact. Cities are facing the dual challenge of welcoming globally mobile workers while managing the pressure they place on housing markets. Locations like Lisbon illustrate how shifting demographics and remote work culture are reshaping urban economies and prompting policy responses to preserve livability and affordability.

Summary of the Main Takeaways:

• 44% of global family offices plan to increase their exposure to real estate.
  
• Housing supply shortages across major economies are driving both rental and price growth.
  
• The U.S. remains the dominant force in global wealth.
  
• Africa and Asia are emerging as growth centers, thanks to population dynamics and economic diversification.
  
• Younger investors prioritize health, purpose, and flexibility, shifting focus away from traditional luxury consumption.
  
• Inflation and trade tensions remain key economic risks, though asset markets continue to perform.
  
• Luxury collectibles dipped in 2024, but real estate is expected to deliver positive returns in 2025.
  
• Remote work and global mobility are influencing property values and prompting new urban planning challenges.

The Wealth Report 2025 captures a moment of transformation. It presents a world where private capital remains highly influential, but where younger investors, shifting economic conditions, and global uncertainties are reshaping priorities. Real estate continues to attract capital, both as a store of value and a generator of income, and wealth creation shows no sign of slowing, albeit with regional and structural shifts. For those navigating this evolving landscape, a deep understanding of economic, social, and political trends will be essential.

To read the full report by Knight Frank, visit:  https://www.knightfrank.com/wealthreport 

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