According to a report by real estate consultancy Knight Frank, Dubai and Miami are the top luxury real estate markets to invest in 2023. Dubai topped the list, with prices expected to increase by 13.5%, followed by Miami with a 5% expected increase. Other cities that made the top five included Dublin, Lisbon, and Los Angeles, with expected increases of 4%. Meanwhile, Seoul and London are expected to be the worst performers, with prices projected to drop by 3% for both cities. New York ranked in the middle of the pack, with prices expected to increase by 2% next year.

However, Knight Frank expects even the strongest luxury markets to cool down next year due to rising interest rates and economic slowdowns. The consultancy predicts that prices will rise by an average of 2% across the 25 cities, revised down from the 2.7% projected six months ago. The report suggests that the wealthy are becoming more discerning about prices, as interest rates rise and economies slow down.

Dubai saw a substantial slowdown from last year, where prices soared by 50%. The city has seen a surge in wealthy residents, driven mainly by Russians looking for a safe haven for their wealth, yachts, and real estate amidst Western sanctions over the war in Ukraine. Meanwhile, Miami remains a popular haven for the wealthy, given its low tax rates and the growing number of financial firms relocating their headquarters or offices to South Florida.

According to the report, cash will be king across the 25 markets as buyers willing to pay all-cash will be more attractive to sellers. Political and economic volatility in many countries will also lead to a flight to safety in real estate, "pushing buyers to mature and transparent luxury markets." Singapore is the only Asian city in the top 10 and one of only four cities whose forecast has climbed in the past six months. Singapore is benefitting from wealth flight from China as rich Chinese citizens move their money, and often their families, to the island to avoid strict Covid lockdowns and a slowing economy.

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