Tokyo was home to the best-performing luxury-home market last year, according to a Thursday report from Knight Frank.
The city saw its high-end home values surge 58.5% in 2025, underpinned by a surge in prime new-build apartment values, said the real estate firm, which analyzed price performance across 100 global luxury housing markets.
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Dubai placed second, with its luxury home prices appreciating 25.1% last year—before the war in Iran began, spilled over into the Middle Eastern financial hub and cooled Dubai’s housing market. The city also maintained its position as the world’s most active super-prime home market last year with 500 home sales above US$10 million.
The statistics shared by Knight Frank don’t reflect the impact of the war in the Middle East, though, which began in February.
“While the war in Iran has become a defining backdrop to regional markets in 2026, many key locations entered the year on the back of an exceptionally strong 2025,” the report said.
Manila, Seoul and Prague rounded out the top five hottest luxury markets.
Across all 100 global luxury markets included in the report, high-end home prices rose 3.2% last year, slightly below the 3.6% increase recorded in 2024. It also marked the second consecutive year that prime-property values rose at a faster rate than mainstream values.
“In many markets, prime residential property has pulled away from the broader housing sector, underpinned by the strength of wealth creation,” Liam Bailey, global head of research at Knight Frank, said in the report.
“While mainstream markets remain exposed to wider economic pressures, the pace at which wealth is being generated is helping to keep demand for luxury property more resilient, even against recent volatility in debt costs,” he added.