High-end homes expected to drive growth, while wealth transfer and global buyer demand shape markets
High-end homes are set to be a leading force in global real estate performance this year, according to a new analysis.
The report indicates that luxury properties outperformed the broader housing market in 2025 and are expected to maintain that momentum as wealth creation, buyer demographics and global mobility continue to reshape demand.
The outlook is based on insights from Sotheby’s International Realty advisors specializing in transactions above US$10 million, supported by research and data from major financial and real estate institutions. For financial advisors, the findings reinforce the growing relevance of luxury real estate as a strategic asset class for high-net-worth clients navigating an evolving investment landscape.
"The overall real estate market was more impacted by elevated interest rates and affordability issues, but the luxury real estate market is positioned for continued outperformance. Building on 2025's robust foundation, the luxury market is seeing increased inventory, growing international homebuyer activity, and a larger percentage of all-cash sales, particularly at the higher end," said Philip White, President and CEO, Sotheby's International Realty. "We expect global sales to strengthen, as luxury property buyers—the strongest segment of the market—are less constrained by geography.”
According to the report, sustained wealth accumulation and significant intergenerational wealth transfer are among the most influential drivers of luxury housing demand. Rising price thresholds and renewed interest from international buyers are also contributing to activity at the top end of the market, even as broader housing segments face affordability and inventory challenges.
Inventory conditions are another key theme. The report notes that luxury housing supply has largely normalized after years of pandemic-era constraints, creating a more balanced environment for buyers and sellers. This normalization is viewed as a positive signal for market stability and transaction flow at the upper end.
“As we look ahead to 2026, inventory levels have largely returned to pre-pandemic norms. This renewed balance in the market signals healthier conditions and provides buyers with a wider range of opportunities,” said Bradley Nelson, CMO at Sotheby's International Realty.
While the report does not single out Canada with market-specific data, cross-border capital flows, global buyer mobility and wealth transfer dynamics are likely to influence premium real estate markets in Canada, particularly in cities and resort destinations that appeal to international and ultra-high-net-worth buyers.
Among the key takeaways from the report:
1. High-end residential property continues to outperform the broader housing market, supported by ongoing wealth growth and reduced exposure to economic volatility.
2. Intergenerational wealth transfers totalled roughly $6 trillion in 2025—about 10% of global GDP—and remain a powerful catalyst for demand in the luxury segment.
3. In today’s shifting market, both buyers and sellers are being encouraged to act early, as a “first-mover advantage” can translate into stronger pricing, better selection or quicker transactions.
4. New-construction inventory has largely normalized to pre-pandemic levels, contributing to improved market balance. In the U.S., supply of homes priced above $1 million is now at its highest point since 2020.
5. Digital assets are playing a growing role in luxury real estate transactions, particularly in hubs such as Dubai, New York and California, with regulatory developments potentially allowing crypto holdings to be considered in mortgage approvals.
6. A majority of affiliated agents report that lifestyle considerations—such as wellness features and access to ski or golf communities—are now more influential in buyer decision-making than in previous years.
7. International buyer interest remains elevated, with foreign purchasing activity in the U.S. jumping 44% and Florida, California, Texas and New York emerging as top destinations.
8. Security has become a primary concern for luxury buyers, with 81% of affiliated agents noting increased demand for features including gated entrances, surveillance systems, backup power and purpose-built safe rooms.
9. Demand is rising for residences designed to support multi-generational living, reflecting both lifestyle preferences and long-term legacy planning strategies.
10. Major global sporting events, such as the 2026 FIFA World Cup and the 2028 Los Angeles Olympics, have the potential to lift property values in surrounding areas, though lasting impact often depends on broader urban development plans.
11. Branded residences are gaining traction worldwide as affluent buyers seek professionally managed, service-rich living environments with minimal maintenance responsibilities.
